Three way to Develop Competitive Advantage in New Age.

In nutshell, Strategy is all about gaining sustainable competitive advantage. This competitive advantage is what creates value for the organisation to maintain its sustainable profits year on year basis. Normally this competitive advantage is gained over the competitors who are offering similar product in same competitive market. But creating the Competitive advantage is not easy as all the players have similar assessment of external market/ environment which is based upon 3rd party independent market research . So when all the players have similar findings of " What Customer wants" then competitive advantage is more about the harnessing the "Internal Environment" and less about "External Environment". Aim is to maximize the fit of my internal Environment/ Capabilities to harness the External Environment ( Opportunity). Following are the three ways of developing Competitive Advantage or ways to maximize my "Internal Environment".

Think differentiation not in product but in business model - At times too much focus on adding additional feature for creating differentiation is lost battle. Often, we stuck into small items and misses out at the unexplored options in the Business Model itself such as Revenue Generation Mechanism, Product/ Service Offering, Peace of Mind of customer, and added advantage of owning the brand. For this Innovation workshop to be crafted to identify opportunities to create differentiation for which buyer would be ready to pay. This innovation can be in product, Customer service, user interface, convenience , Supply Chain, Manufacturing or out of the box design. All areas are to be explored.  Google's competitive advantage over Microsoft is of business model not of product/ Service.

  

Focus on Strategic Human Resource: This is the most trickiest part of creating competitive advantage. Competitive advantage is created first in mind of employee before it comes on paper and finally in the learning systems of organisation. Identify these critical resources, Nurturing them and providing them resources ( Environment) is one of the major function of Top Management. These Strategic Human resources are pillar of Innovative organisation, as they are from different fields such as researcher, Designer, Engineering, Business Strategy, Marketing, Sales and Service. Here decisive action is identifying the motivating factor of these employees, which is very unique to each individual. This unique addressal of aspirations of these Strategic Human Resources is quint essential for the innovative Organisation. Apple's competitive advantage is out of the sheer passion of few individuals.

Diversify the risk: Often focus on creating competitive advantage channelize organisation's energy/ resources on profit generating products/ services. This leads to unpreparedness for unnoticed changes happening in consumer preferences, regulation and other market forces. So Diversify the competitive advantage , distinct from the previous in unexplored territory and completely unique. This might be in exploratory/ research phase or less profitable generating phase. This diversification is very critical competitive advantage. End of KODAK is good example of inability to de-risk the business from digital photography.

These three items are very essential to develop true competitive advantage , in turn preparing successful strategy for the organisation.