There is a myth in business that your organization must have a sustainable competitive advantage to survive in our uber-competitive world.
Setting aside the word sustainable for a moment, a competitive advantage is something that sets you apart from your competition. It could be that you have a product they don’t have. It could be the service and experience you deliver. You may have a more convenient process. These are what win you business today… but they do not guarantee that you will keep that business tomorrow.
In other words, what works today may not work tomorrow. And rest assured, you have competitors that are looking for ways to spend your competitive advantage.
The Amazon story comes to mind. It started as an online bookseller, taking on the entire brick-and-mortar book industry. It continued to grow to where it is today. Talk about a competitive advantage! Who would want to take them on? I’ll tell you who… Target and Walmart. They are in an all-out online war to win customers and market share in the highly competitive online consumer sales category.
Amazon’s competitive advantage, a website with one of the best online shopping experiences on the planet, seemed to be a sustainable competitive advantage for a time. Today, the competition is running and gunning for Amazon. And, don’t think they don’t know it… they keep creating new programs year after year—and even more often—to thwart the competition.
Don’t Fall Asleep, or Your Competition Will Eat You Alive
I just received a copy of Ruthless Consistency by Michael Canic, Ph.D., president of Making Strategy Happen. There are some powerful nuggets of information throughout the book.
One that caught my eye had to do with the topic of sustainable competitive advantage. Canic points out that BlackBerry, Kodak, and Blockbuster, at one point, all had competitive advantages. Where are they today?
How about the 178-year-old Thomas Cook Travel Group? After all that time, it is no longer. In a tongue-in-cheek comment, Canic writes, “Help me out here. Exactly which companies had a sustainable competitive advantage?”
I’m sure you have seen great companies perish, not because of the COVID-19 pandemic, but because competitors came along and took them out, either by driving them out of business or acquiring them.
I look back to one of my favorite books, In Search of Excellence: Lessons from America’s Best-Run Companies, by Tom Peters and Robert Waterman, published in 1982. I loved that book, and it still offers some valuable lessons. But where are some of the big-name companies that were profiled in the book? Companies like Wang, Atari, and Kmart? Despite being put in the category of best-of-the-best, they no longer exist.
You see, no competitive advantage lasts forever, even excellence.
This article has been reprinted with permission from Shep Hyken´s Forbes page.