Harvard Business Review dishes on how AI expertise is reshaping business strategy in 2025

The March-April 2025 Harvard Business Review piece has examined how artificial intelligence is fundamentally changing the nature of business expertise and organizational competition. It deftly explores how companies will need to adapt their strategies as AI makes specialized knowledge and capabilities more accessible. Here’s HBR’s high-level take:

Core Premise: AI is transforming how businesses leverage and maintain competitive advantage by making previously scarce expertise more readily available and cost-effective.

• Businesses are fundamentally collections of expertise, combining theoretical knowledge and practical skills across multiple domains
• Companies create value by efficiently scaling their expertise to address customer needs
• Most organizations distinguish themselves through superior capabilities in a select few critical areas

Real-World Examples: Leading companies have historically built their success on domain-specific expertise that created lasting competitive advantages.

• Toyota established market leadership through excellence in lean manufacturing
• Walmart developed superior distribution capabilities
• Procter & Gamble built expertise in consumer marketing
• Nvidia distinguished itself through GPU design proficiency

Expert Perspective: The authors bring significant authority to this analysis, combining insights from both industry and academia.

• The analysis is led by Microsoft‘s senior strategy team, including their Chief Strategy Officer
• Academic perspective is provided by Harvard Business School professor Karim R. Lakhani, an expert in AI business competition

Strategic Implications: The increasing availability of AI-enabled expertise will require businesses to rethink how they build and maintain competitive advantages.

• Companies must evaluate which areas of expertise truly differentiate them in the market
• Organizations need to determine how to leverage AI to enhance their core capabilities
• Businesses should assess which expertise areas can be effectively augmented or replaced by AI solutions

Looking Forward: As AI continues to democratize access to expertise, companies will need to identify new sources of competitive advantage beyond traditional knowledge-based differentiators. The challenge for business leaders will be determining which core competencies to maintain internally versus accessing through AI-enabled solutions, while ensuring their organizations remain distinctively valuable in an increasingly AI-augmented business landscape.