14th August 14, 2006

Sustainable Competitive advantage:

Following are few quotes-

• Vision is the art of seeing things invisible – Jonathan swift
• Few other quotes of Chinese writers.

Developing SCA (Sustainable Competitive Advantage)

• SCA is the key to successful strategy
• A strategy can involve a variety of functional area ofstrategies
• Pricing strategies
• Distribution strategies
• Global strategies
• Infinite way of competing exists

SCA is the key to successful strategy –

Following 4 factors need to be considered in developing a SCA-
1. The way you compete
2. Basis of competition
3. Where you compete?
4. Whom you compete against?

The way you compete:

Product strategy
Positioning strategy
Manufacturing strategy
Distribution strategy etc.

SCA
Basis of competition
* Assets and competencies

Where you compete

* Product – market selection

Whom are you compete against:

Competitors selection
The way you compete:
• Product Strategy:
• Positioning Strategy:
• Manufacturing Strategy:
• Distribution strategy: like Dell or IBM etc.

The basis for Competition:

• The strategy needs to be based on a set of assets and competencies.
• Without the above SCA will not be enduring
• Examples:
a. Quality cannot be pursued without design and manufacturing
competencies.
b. Premium service positioning cannot be pursued without the
right people and culture.
Where you compete:
• The target product market.
• Examples:
a. P&G potato chips had a host of assets:-
b. Consistent product shelf life, a crush proof container and
national distribution
c. Problem was that these attributes were not highly valued by its
target market which was concerned mainly with taste…
d. It took several years for Pringles to penetrate the market, till it
improved both the actual and perceived taste!!!
Whom you compete against:
• Sometimes an asset or competency will form an SCA only gives the
right set of competitors
• It’s a vital to assess wether a competitor is
a. Weakness, adequate or strong with respect to assets and
competencies…
• Examples:
a. If Flight safety is important to airline passengers and if a
competitor like an economy airline is perceived to be a weak in
safety then SCA would indeed exit.
Additional Characteristics of SCA’s
• Substantial: should be enough to make a difference.
a. Example: only creating a marginally superior quality of
carpeting may not be valued adequately by the market
• Sustainable:
a. Example : As PC’s are becoming more of commodities, any
SCA based on the technology difference can be very weak and
non sustainable
• Leverage: Difference should be communicable and the cause should
believable