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.
You will never
lead in innovation
be faster to market than your competition
if you depend on other for your core technology.
3 Strategies of
While, according to the new standard operating procedures (SOP)
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.
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
and eliminate speed breakers.
several examples of established organizations
businesses. Several fell into the same pitfall – mistakenly assuming the
initial strategy, developed at great expense by
outside experts, was
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
, where technology
is embedded in
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.
recognized as critical to fast-track technology company success – and even
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
Chuck Schwab, the founder of the company, realized that if he was going to
grow the company
gain a competitive advantage, he had to own
the technology. So, he acquired a back-office computer Beta System.
for Building a High-growth Business
Given their in-house computing capabilities,
owning the technology – their
– 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
As a result, Schwab started unleashing
innovations on the market one after another and became the leader in the
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