Capability Quote by Walter Kiechel
“The experience curve says that your costs should probably decline by 15% or 20% with every doubling in your experience making a product, approximately how many of them you turn out. It also says that if you have the biggest market share, meaning the most experience of anybody in your competitive set, you should have the lowest costs, and the resultant capability to underprice your competitors, maybe forever. The abiding lesson of the experience curve is that companies need to discipline themselves to keep reducing their costs, year in, year out, if they are to remain competitive.”
About This Quote
Source Book: The Experience Curve, 1996
Companies that continuously lower costs through learning gain competitive advantage, but must stay disciplined over time.
In simple terms: Learning reduces costs, sustaining advantage.
Key Takeaway
Focus on ongoing cost reduction.
Themes
competition
efficiency
learning
Mood
analytical
strategic
Type
business
educational
When to use this quote
- manufacturing
- software development
- service delivery
- market expansion
Key Concepts
experience curve
scale economies
strategic discipline
Questions to Reflect On
- How can firms maintain cost discipline?
- What risks arise from over‑reliance on experience?
A Different Perspective
Disruptive innovation can reset cost dynamics.
