Today I answered your question: “How do you maintain a competitive advantage?”
Creating and maintaining a strong competitive advantage is a highly specialised skill. In contemporary businesses it is often the job of the Chief Technology Officer (CTO). So, from a CTO’s perspective, it is a company’s ability to adapt that is key to maintaining a dynamic competitive advantage. Here are two reasons why.
The current business environment changes every 18 months as a result of technological advancements. Technology advancements, for example, can create new ways to deliver services (e.g. Netflix streaming films rather than dvd’s), creates new types of products (VoIP phones rather than analogue lines), and new ways to deliver value to customers (convenient e-commerce rather than in store shopping). Another point to consider is that as competitors become aware of your competitive advantage, they copy it while overcoming what you are not able to offer your customers, so creating a competitive advantage is an ongoing activity.
So, a key capability each organisation should have to maintain a competitive advantage is the ability to adapt to the changing business environment and to customers changing buying habits and needs. However, not all aspects of a business can be adapted. For example, changing the culture of a well-established global organisation is tricky, time consuming (longer than 18 months) and seldom successful (IBM is an example of a successful cultural change).
Regular research can provide an intimate awareness of the business environment that provides insights into change. Insights come from current, authoritative research of competitors, market trends, legislative changes, and emerging technology trends on a local and global scale. Local and global is necessary because the internet has destroyed geographical boundaries. As changes occur the company can identify new opportunities for competitive advantage and adapt accordingly.
Another way an organisation can be adaptable is to gain insights from customers by effectively and efficiently collecting, analyzing and skilfully using relevant knowledge from within the organisation. A simple example we see everywhere is asking customers for feedback on the product/service/process as they have experienced it. The feedback can be used to enhance the organisation and increase the customers satisfaction dealing with the organisation. This translates into a loyal, happy customer who will think twice about leaving for a competitor. It also helps the company stay in touch with their customers changing habits and needs.
This answer to your question is an example of what retired CEO of General Electric, Jack Welch, meant when he said, “An organisation’s ability to learn and translate that learning into action rapidly is the ultimate competitive advantage”.