Article -> Sustaining a Competitive Advantage

Date Added: February 2005

Despite a highly competitive, commoditized marketplace, it is possible for organizations to obtain and sustain their competitive advantage. Doing this effectively consists of cautious navigation between recent data and future indicators.

Recent data* of more than 16,500 businesspeople from 148 countries stated that executives are less optimistic than they were in January 2004. These businesspeople also believe that pricing pressure is the most pressing business concern during the next 12 months.

Conversely, future indicators** note that between now and 2008, most industry markets will continue to rise and business will be profitable. Companies should be concerned with having the right people and resources to foster this growth.

While this information is alarmingly in contrast with each other, even the most pessimistic executives cannot stop conducting business. They must determine key steps to creating and sustaining their competitive advantage - the same as the idealistic executives that will follow the future indicators.

A roadmap of key steps includes:

• Developing a strategic plan. This plan should extend through 2008 and outline key objectives related to products, services, resources, customers and employees. It should be based on measurable information - not perceptions or assumptions.
• Investing in capital. Capital is defined as technology, automated equipment, partnerships s with key suppliers or vendors, and other items for increased productivity. Research continues to demonstrate that companies that do more with less are market leaders. This means that capital beats cheap labor.
• Knowing what you don't know. Nostradamus wasn't perfect, nor are the future indicators. Leaders must know when to trust outside experts and be able to ask for (and invest in) assistance to sustain a competitive advantage.
• Defining products and services. Discovering, understanding and prioritizing customer requirements through a proactive Voice of the Customer process drives innovative product and service development. Determine and solve customers' problems now - before they occur.

Whether you're an idealist or a pessimist, following this roadmap will help sustain your competitive advantage. It won't be easy. It requires strategy, planning, and execution with your organization, employees, market and customers. Without it, you may be another one of the 16,500 businesspeople that will continue to become less optimistic, complain about pricing pressures, and find yourself with a lot of extra time because your competitors will be busy working with your customers.

* "Global Survey of Business Executives." The McKinsey Quarterly: November 2004.
** "Road Signs to the Future." Presented by Brian Beaulieu and The Institute for Trend Research. February 2005.