On Competitive Advantage

Via Rajesh Jain, an article with a nice human touch on how defining a firm’s capabilities, purpose, and niche (business model issues if you ask me) creates competitive advantage:

Is it so different for the leader of a company to ask, “What is this company capable of?” than it is for an individual to wonder, “Who am I?”
it’s not competitive advantage a company should seek, but distinctive advantage. Finding this distinction, like finding the meaning of self, requires going within.
he advises company leaders to look inside their firms to find capabilities—not outside. “The best way to find one’s own capabilities is to ponder on them—go deeper—not wider


“We are at the beginning of a dramatic change in the way people view strategy. Most people assume that the #1 most important goal of strategy is to achieve competitive advantage—in other words, to be better, in some way, than your competitors,” explains Makadok. “But today, we are increasingly recognizing that distinctive advantage trumps competitive advantage virtually every time because being different is more important than being better. The reason for this is simple: If you just aim to be better than your rivals, using the same metrics that they use, then even if you succeed, you will still always have competition nipping at your heels. On the other hand, if you aim to be different, then you may carve out a niche where you have no real competition.”

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