Sustainable Business Competitive Advantage is Key to Success
Building Sustainable Competitive Advantage
It is not enough just to have an advantage over your competitors. For your business to succeed, it has to weather the storms of competition. You have to be able to beat today’s ferocious market forces and volatility. In other words, your competitive advantage must be sustainable and able to endure the test of time
Understanding your competitive advantage is critical to your survival. It is why you are in business. Keep in mind that what you do best is what draws customers to buy your product or service rather than your competitor’s.
Gaining a sustainable competitive advantage is not as simple as just being different. Your competitive advantage is not a list of your strengths. In today’s market, too many companies:
- Have a competitive advantage but don’t know what it is
- Know what their competitive advantage is but neglect to tell clients about it
- Don’t have a competitive advantage but think they do
- Mistake “strengths” for competitive advantages
- Don’t properly focus on their competitive advantages when making strategic and/or operational decisions
Performance Is The Key
Competitive advantage comes from what your people do (performance), not from what they know. How well does your company build and maintain a competitive edge? Five challenges most organizations face in gaining competitive advantage:
- Recognizing and taking advantage of market opportunities
- Defining product and/or services that create value for customers
- Attracting, retaining and improving the best available resources for providing product and services
- Managing uncertainties in creating and realizing product and service opportunities
- Sharing the resulting benefits with your resources (employees and suppliers)
Attracting, retaining and improving the best available resources is perhaps the most difficult and often overlooked of these challenges.
Performance-based training is one way to meet this challenge. Performance-based training emphasizes proficiency in job tasks essential to your competitive advantage. It is based on clear definition of the tasks, skills and knowledge needed to competently perform each job in your organization.
A performance based training program is a planned, organized sequence of activities designed to prepare persons to competently perform their jobs. Competitive advantage requires that every employee maintain their job performance at the highest levels possible, or improve to meet the need.
Training and Performance Improvement departments must be able to guarantee that every learner can demonstrate full competence on every skill taught. How do you know if the training you are providing is performance-based? True performance-based training applies scientific principles on how people, learn, think, and remember. It requires the application of an instructional system design model that provides for:
- Needs assessment
- Curriculum development
- Course design and pilot delivery
- Evaluation
There are four key characteristics of true performance-based training that will help you determine how your organizations training rates, and where you can potentially make improvements.
- Does the training provide clearly stated performance objectives?
- Is the training derived directly from the job?
- Does the training use vocabulary and examples that learners will relate well to?
- Does the training focus on providing learners with practice and immediate feedback on all the skills required to perform a job to contribute to competitive advantage?
Role of Management
Enhancing human performance requires a team of managers and supervisors that can perform as both a well organized management team and have an in-depth understanding of people’s basic needs and behaviors. Managers must be able to make your business vision a reality by developing employee’s abilities in team work, problem solving, and critical thinking. It is not enough to merely have a vision, your managers must be able apply corresponding actions to make it happen.
A vision without corresponding action is merely a dream
Action without vision is a waste of time
Vision and corresponding actions will take you to new heights!
- Joel Barker, Business of Paradigms
Corresponding action is derived from the organization’s mission statement. The mission statement will only drive competitive advantage if it is properly designed and cuts across the entire organization (multilevel).
Managers must apply critical thinking to all aspects of the organization and build a strong business case for decisions. Effective critical thinking takes into account sustainable competitive advantages of every process and opportunity.
Considering Strengths, Weaknesses, Opportunities and Threats
In making use of SWOT Analysis, start with overall strengths and weaknesses, then find the best combination of relative strengths (and the absence of critical weaknesses) to use against specific competitors in specific markets.
When developing a SWOT Analysis, either for yourself or a competitor, consider these points:
- Generally, even in most complex situation, there should be no more than 3-4 conclusions for each category of a SWOT.
- Both strengths and weaknesses are internal; they are within the direct control of the company
- Both opportunities and threats are usually external; they are outside the direct control of the company
- By definition, a key point for one category cannot be a key point for another category
- Strengths and weaknesses are relative and have limits. No strength or weakness applies against all competitors in all market situations.
Comparing the Competitors’ SWOT Analysis to your own SWOT Analysis can help to identify true strengths and opportunities for you and the competition. For example, if your analysis identified the same strength for you and a key competitor, it is possible that it is not a strength for either of you – but is actually a requirement for competing in this market. Be careful not to define a requirement such as this as a competitive advantage – it is NOT!
Conclusion
Sustainable competitive advantage allows for the maintenance and improvement of your company’s competitive position in the market. It is an advantage that enables your business to survive against its competition over a long period of time. The advantage comes from your company’s unique skills and resources working together to implement strategies that competitors cannot implement as effectively.
Keep in mind that most advantages can be duplicated within a period of time. Approximately 70 percent of all new products can be duplicated within one year and 60 to 90 percent of process improvements eventually spreads to your competitors. Competitive advantage is a dynamic process that demands constant attention. It is NOT a once and done flavor of the month!
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Brice Alvord has over thirty years experience as an internal and external performance improvement consultant. He holds a BA in Sociology/Psychology from Central Washington University and an MBA degree from City University of Seattle. He is the author of over two dozen books on continuous improvement and training. For more information, visit our website at: http://www.aleragroup.com Article Source: http://EzineArticles.com/?expert=Brice_Alvord |
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