Analyzing Your Competitive Advantages

If you are in business, you are at war. At war with your direct and indirect competitors – for the checkbooks and wallets of your consumers. To succeed and prosper – and to achieve your strategic objectives and implement your corporate vision – you have to win this war. To make it happen, you will need decisive advantages over your competition. Both direct and indirect. Advantages that must be carefully managed.

Probably the most important challenge in managing your competitive advantages is that your ongoing battle with your competition – and your aggregate competitive position – is a highly fluid situation. Your KEF change all the time; so do needs and especially desires of your stakeholders; your competitors constantly come up with new tricks – by themselves and reacting to your moves… And in other to gain and maintain an upper hand, you must develop, acquire and maintain competitive advantages at all times.

To make it happen, you will need highly competent manager of your competitive advantages (and maybe even a team) that follows a highly efficient methodology and process of managing your competitive advantages. Of course, you will need to develop and maintain – at all times – a comprehensive and accurate description of your competitive advantages over each of your direct and indirect competitor and overall. Which requires development a comprehensive knowledge base on your competitors.

A very important issue in managing your competitive advantages is ensuring the power and stability of each one. Which is actually a part of your risk management function. In other words, you need to assess the risks of losing each of your competitive advantages (e.g., due to losing a corresponding professional) and develop measures to prevent this from happening.

Naturally, the total costs of these preventive measures must be many times lower than estimated financial losses from losing a specific competitive advantage. In other words, it should not cost you more to maintain a specific advantage than it generates in gross cash flows.

Like it is the case with your core competencies, your always have actual, unwritten core competencies – even if you do not have declared, written ones. Therefore, one of the primary objective of managing your competitive advantages is making sure that these two sets match each other.

Again, your competitive advantages by themselves are all but useless. To be useful and valuable to your company they must be tightly integrated into your strategic and operational management process. In other words, you need to develop and deploy a highly efficient corporate process of using your competitive advantages in your strategic and operational management.