Last week I attended a Strategy class. In one of the slides on his presentation our professor wrote the following definition for “Competitive Advantage”:
The ability to create more economic value than competitors
* There must be something different about a firm’s offering vis-à-vis competitors’ offering
* If all firms’ strategies were the same, no firm would have a competitive advantage
* Competitive advantage is the result of doing something different and/or better than competitors
Two things jump out to me in the definition:
- I don’t see Competitive Advantage as the ability to create more economic value than competitors. I think competitive advantage is how we create value differently than competitors. There is a big difference. Our competitors don’t have to be our enemies and it does not have to be a race. We can both be different.
- Coming from a strategy professor I am not surprised to find such an emphasis on the importance of strategy, but I don’t think that: “If all firms’ strategies were the same, no firm would have a competitive advantage”. There is the little issue of implementation. And similar firms, with similar mission, vision and goals, handle implementation differently.
Same same but different. One of the readings on that same course (“The fundamental dimensions of strategy” by Frederic Frery) included this statement:
“Because the value of any strategic concept resides in its ability to create competitive advantage, the concept becomes irrelevant as soon as it is extensively adopted. In a hypercompetitive context, the better a strategic idea, the shorter its life”
We live in a society of imitators and imitation. From popular culture to workplace behaviour to academia to business. And in some ways, that is not a bad thing. When a company comes up with a new idea, it is quickly copied, sometimes in better ways. The bar is constantly rising. What was new last week is the excepted average next week. This creates challenges. How to create innovation and differentiation that will last? Or on the other side how to let advantages go, because we live in the age of temporary advantages.
But this also creates temptations. To imitate and not innovate. To be like somebody elase, because it is safe. Because it is easy. This is a temptation we should be careful off. Do you want to out-Apple Apple? Is that possible? Companies tried to out-Southwest Southwest and failed.
And what it true in strategic business life is even more accurate in your personal and professional life. As Peter Bregman accurately articulates:
Trying to distinguish ourselves by being the same as others, only better, is hard to do and even harder to sustain. There are too many smart, hard working people out there all trying to excel by being the best at what everyone else is doing. It’s simply easier to be unique
What is going on with your Competitive Advantage?