Sustainable Competitive Advantage

There are many companies today that enjoy short term success but what many of them are probably missing out on are the fundamentals for sustaining their competitive advantage. There is no silver bullet that can assure success or sustainability but there are some primary drivers that are a basic necessity in the long term.

Firstly the company has to have a Differentiating competency – I am not referring to the USP of a product or a service that the company provides. A differentiating competency is something more intangible it can be a lot of things, the accent on ethics, emphasis on CSR, thrust on employee satisfaction or the stress on excellence and quality. These abstract qualities if truly ingrained into the culture of the organization will result in the consumer associating the company with these competencies in the long term.

Secondly the company must never make the mistake of outsourcing their core-competency. Core-competency refers to the portion of the value chain where your expertise lies. A shoe manufacturer who is a market leader in distribution strategies must never outsource its supply chain management.

Thirdly Innovation is the best defense against change. Change is permanent and by induction Innovation has to be permanent too. Innovation has to be continuous in two areas – The product/service offering and in your core-competency area. For e.g. the above mentioned shoe-manufacturer has to not only introduce innovation in the shoes that he produces but also in the supply chain distribution system (his core-competency) to add maximum value.

Lastly a Venture strategy ….The Company has to always be on the look out for new ventures that will fill gaps in the market/help the company expand. The shoemaker probably has to look for opportunities in associated markets like sports apparels, gym equipment etc.. and plunge in at the right moment.