Wikipedia defines competitive advantage as:
“An attribute that allows an organisation to outperform its competitors”.
Michael Porter breaks competitive advantage into two forms, low cost or differentiation and provides more detail in the revered Porters Five Forces Model. The truism is to be successful companies need to create competitive advantage. Jack Welch the former CEO of General Electric once said:
“If you don’t have competitive advantage don’t compete”.
The interesting thing about the quote is, it is in the now. It does not reference any requirement for competitive advantage to be sustaining or resilient it merely observes if you don’t have it, you cannot do business. An interesting question might be how long does competitive advantage need to last?
The HBR article, ‘The Transient Advantage” notes:
“The dominant idea in the field of strategy – that success consists of establishing a unique competitive position, sustained for long periods of time – is no longer relevant”.
Were time and resource available a very interesting project might be to study the velocity of transience in competitive advantage over time. The author would suggest that in the digital age the ability to sustain a competitive advantage is more challenging than in the past.
Recently the concept of FAST goals presented in the 2019 MIT Sloan Management review, ‘FAST beats SMART’. FAST stands for Frequent, Ambitious, Specific and Transparent. FAST’ underlines the importance of a more frequent review, such an approach makes sense in today’s digital disruption era.
Key SentinelReward Lesson: In summary not only is competitive advantage transient, but the velocity of the transiency also appears to be accelerating and corporate entities need to be prepared to operate and thrive in such an environment.