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The Importance of
Owning Your Competitive Advantage
"Many companies, acting solely
in the interest of short-term expense reduction, have tossed the baby out with
the bathwater and ended up outsourcing the only thing(s) that allowed them to
get to market fast or first."
~ J. Jennings and L.
Haughton
You will never
→
lead in innovation
 or
be faster to market than your competition
if you depend on other for your core technology.
→
3 Strategies of
Market Leaders
While, according to the new standard operating procedures (SOP)
and
→
80/20 Principle it is advisable to get rid of
and outsource everything that isn't vital to your core business, make sure
that, while doing so, you don't "toss the baby out with the bathwater".
Every business can and should own one or several competitive advantages –
the difficulty is figuring out what they are.
→
Sustainable
Competitive Advantage
is an advantage that allows uninterrupted maintenance and
improvement of your enterprise'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.
>>>
Owning your competitive
advantage will allow you to build it continuously, be more
→
flexible
strategically,
and eliminate speed breakers.
>>>
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Differentiation
Strategies
 Strategy
Innovation vs.
Strategy Outsourcing
Researchers
have studied
several examples of established organizations
→
investing in
experimental
businesses. Several fell into the same pitfall – mistakenly assuming the
initial strategy, developed at great expense by
outside experts, was
correct...
More
Acquisitions as
an Important
Source of Competitive Advantage
The role of
venture acquisitions had evolved as a strategy tool for fast-track
technology-led companies. In the current rapidly changing environment and in
the era of
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Systemic Innovation
, where technology
is embedded in
people and
processes, it's often not sufficient to acquire
just a technology to get access to a new competitive advantage – the entire
company must be acquired.
Thus well-planned
M&A are
recognized as critical to fast-track technology company success – and even
survival...
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Charles
Schwab's Success Story1
>>>
Initially Charles Schwab, a discounted stock
brokerage company, routinely outsourced, like other financial services
firms, their back office information technology to other companies. After a
while,
Chuck Schwab, the founder of the company, realized that if he was going to
quickly
→
grow the company
and
gain a competitive advantage, he had to own
the technology. So, he acquired a back-office computer Beta System.
→
10 Rules
for Building a High-growth Business
Given their in-house computing capabilities,
owning the technology – their
competitive advantage
– provided Schwab the ability to:
-
Push every known boundary and constantly ask
the "what if we could do this for our customers" question without regard
what can't be done
-
Have the technology and other resources ready
by the time people knew they wanted it
-
Be faster than competitors in getting to
market.
>>>
As a result, Schwab started unleashing
innovations on the market one after another and became the leader in the
new
market niches...
More
→
7 Routes To
High Profits |
