Competitive Advantage & its Evidences

adapted from the original article by Roger Martin

There is this notion that in the modern world, especially in the technology sector, competitive advantage is fleeting.

“People will always think the current time is more VUCA than any previous time because we know now how all previous times played out — thanks to history books — and we don’t know how what is going on now will play out.” (Roger L. Martin)

In the past, competitive advantage involved engaging in actions that gained competitive advantage, and then not changing, adapting, or improving as the industry and competition evolved and adapted around you.  Though there is no evidence that this approach used to work all the time, it is implied that management scholars used to advocate for this approach — get competitive advantage and then do nothing.

In the new world, you have got to stop doing what you did in the old world and instead continuously change your strategy — otherwise you will disappear.

What did achieving that initial competitive advantage provide the companies? For Tide, it earned the position as the dominant detergent in the early days of automatic washing machines.  Because it kept on innovating, nobody has been able to catch up — for 76 years and counting. Same with Walt Disney. Same with Google. Same with Facebook.

Nothing relevant has changed when it comes to competitive advantage. Gaining competitive advantage earns you the option to continue to stay ahead. It was never a guarantee then and it is not a guarantee now. If you stop working on protecting, enhancing, and extending it, you lose your advantage.  This has always been the only way.

In modern day competition with the dreaded network effects, competitive advantage is getting so powerful that if you get a lead, you don’t have to do a lot more to dominate for a generation or more.

One has to be discerning when it comes to business theories, a skeptical consumer of business models. This way you own and control your models rather than allowing them to own and control you.

Follow the lead of elite companies, such as P&G, Pfizer, Walt Disney to name a few. Invest big in gaining unique competitive advantage, think every day about how you can stay on top. Listen to customers. Watch out for non-traditional competitive threats. Improve and adapt.

We believe that a lucid and well-crafted sustainable advantage position is a critical aspect of strategic planning. We use our proven SCA process to do this work. Like the many firms that have gained immeasurably and continue to gain from having a clear advantage, your business can do this too. We can help you to develop a concise advantage for your business. Get in touch.

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Cliff Chalon

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