The Holy Grail: Competitive Advantage

What is your competitive advantage? If you’re not able to answer this question, there’s a good chance you don’t have one. And if you don’t have one, there’s the distinct possibility that your company won’t be around much longer. We can break competitive advantage into three areas, starting with your capabilities. What are your key resources, assets and core competencies? Next, what are the primary activities you perform to mold and shape those capabilities, things like manufacturing, operations, marketing, sales, etc.? Finally, what distinct offerings are produced by those activities?

Netflix is one example of a company that’s continually honed their capabilities, activities and offerings. Despite a recession that’s hit most companies hard, Netflix continues to add subscribers and most importantly, keep the subscribers it has. With more than 100,000 DVD titles and growing, Netflix has linked their library (capabilities) and its proprietary software Cinematch (activities) to squash such formidable competitors as Blockbuster and Walmart with an offering customers want. While the DVD kiosk Redbox is making in-roads, it’s hard to imagine Netflix not getting the girl at the end of the movie. If you take the time to assess your business and your competitors in the three areas of capabilities, activities and offerings,  you’ll be able to identify and work on developing a competitive advantage. If not, your business will have the same fate as the camp counselors in Friday the 13th.

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