A Competitive Advantage gives you an edge over your competitors – and this translates into a proven ability to generate greater value for your business and for your stakeholders. The more sustainable your competitive advantage, the harder it is for your rivals in the market place to catch up.
There are two (2) kinds of competitive advantage – according to Michael Porter*:
– Comparative Advantage is when your business has the ability to produce and deliver its product or service at a lower cost. This means you are able to generate a higher margin and with the lower price gain market share.
– Differential Advantage is when your product or service is so different to what your competitors are offering AND it is seen as being superior. This advantage is usually driven by high technology advances, superior people in your teams and a strong brand identity. This advantage tends to deliver wider margins and greater market share.
Competitive Advantage is derived from at least 6 key factors coming together in complete harmony.
When these factors work together, you gain the ability to outperform all your competitors.
Popular expressions of competitive advantage include being a:
Which of these expressions apply to you?
What are your consciously and consistently improving?
Professor John Kay* describes four sources of Competitive Advantage…
Key elements within these sources of Competitive Advantage…
Challenges in maintaining a Competitive Advantage…
The challenge of creating and sustaining a Competitive Advantage is these four (4) elements all interact with the four (4) sources and create a medley of factors which are unique to your business.
The chances therefore of you or your team being able to accurately guess your competitive state are very slim. After all – how do the puzzle pieces of your business, the perceptions which hold it together and the competitive decisions being made all come together?
The overall success and sustainability of your business is secure when all the pieces come together smoothly and correctly.
Understanding your true Competitive Advantage comes from gaining a unique and deep insight into how the facts from your business interact with the current perceptions and understanding held by your leaders. This will help you to understand why certain decisions either are – or are not – being made and implemented across your teams.
The Competitive Strength Report has been developed to enable small and medium organisations to measure the alignment of thinking between leaders and their teams. It also compares this thinking to that of premier Excellence award winners that were the subject of Dr Singhal’s research.
The benefits of having a robust Competitive Advantage have been quantified in Dr Singhal’s research. The link between excellence, sustainability (the Abyss) and financial results is stark.
No business can afford to ignore this message.