Competitive Advantage: 5 Steps To Regaining Your Competitive Edge

Current Situation

Many American business leaders are complaining that they cannot compete due to the current state of the economy and the massive outsourcing of jobs to other countries. During the past couple of years the headlines of many local newspapers, national publication and business publications have been full of companies that have gone out of business or declared bankruptcy. Many more organizations are at risk for going into bankruptcy and almost all are blaming the current economy as the reason for their demise. Many American business leaders have talked about the increased competition from around the globe as a one of the reasons for these economic conditions. They often complain that they cannot compete with the cheaper labor rates found elsewhere and they cannot hire enough good workers at a reasonable price here to compete. These are the kinds of problems that managers complain about today. President Obama recently addressed this issue in his State of the Union Address given on January 25th, 2011. In his address he said “And now it’s our turn. We know what it takes to compete for the jobs and industries of our time. We need to out-innovate, out-educate, and out-build the rest of the world. We have to make America the best place on Earth to do business.” Do you think if you had a competitive advantage over your competition this could change your ability to compete? Would it not allow you to get a fair price and get you out of the commodity price wars? I believe it would, so now what can you do about it?

What Should We Do About It

So the question is how does an American business leader/executive rally behind Obama’s call to action? According to recent studies the United States is still one of the most productive countries in the world, but we are also primarily manufacturing the most complex products. Therefore many of the product/services consumed in the United States are imported. Why are we losing so many jobs and buying so many more foreign goods than domestic? The answer lies in the way most organizations compete within in their marketplace. Most organizations will develop products and services that are already being successfully sold within the marketplace as this minimizes their risk. Unfortunately this approach leads to the situation where an organization becomes seen as a “me too” organization. This is an organization that must compete primarily on price, or possibly it might have a higher value for the customer. There is not any real appreciable difference between their products/services and their competitor. You need to distinguish yourself, so that you are different and unique within the marketplace. As history has proven, if you are a market leader, or have a unique competitive position, the price you charge for your products and services is not usually an issue. Take a look at the Apple iPhone, first year the price was almost double what it was in the second year. When the other organizations started selling their smart phones, Apple was forced to reduce the price and begin competing on features/functionality as well as price. Therefore, if your organization can create a competitive advantage which makes you unique the effect of the economy and your competition will be minimized on your organization. This will enable you to receive a better fair market price for the products and services that you provide to your customers, as well as increased loyalty. A competitive advantage can be created by adding innovate features to your product, reducing the cost to produce or introducing a new unique product,

5 Steps for Creating a Competitive Advantage:

Develop a strategy -You must create a strategic vision that identifies your unique abilities and strengths that will enable you to develop and deliver using this advantage. Your advantage may be producing the product/service at a reduced cost, offer a higher value with it to the customer or it may be you have are more agile than the competition. This strategy that is developed should be in the form of an end-state vision that clearly shows how the organization should operate to leverage your unique capabilities.

Develop a tactical plan – To make the strategic plan actionable a good solid tactical plan must be developed. This plan must include the milestones that are necessary to ensure that you realize the end state vision. It should also include the time frames of when the expected benefits will begin to be realized. In addition, the time frames of when the features/functionality necessary to reach the end-state vision will be realized. The success criteria need to be clearly identified and how you will know when it is successfully completed.

Implement the plan – This tactical plan must be implemented with excellence and efficiency. All milestones should be tracked and the plan revised as conditions dictate. You need to ensure that all Key Performance Indicators have been identified, and how they are going to be tracked.

Execute the operations – Once the plan has been completed and successfully implemented, it must be executed with efficiency and excellence to ensure that all of the desired results are realized. All operations must be executed with excellence and need to be rigorously monitored to ensure that the intended results from these operations are realized.

Review and Revise – After the plan has been implemented, business leaders must review the actual results against the planned results to ensure that they are realizing the benefits that were expected. Any variations in the results need to be analyzed and revisions to the operations need to be planned to get the operations on track to get the intended results.


Today, Organizations cannot afford to sit back and say, “Look at what we just accomplished and see how good we are!” There are only two states in life of an organization, it is either growing or dying. There is no such thing as the status quo. So an organization must seek to continually improve and find ways to improve their processes and operations to do things better. Otherwise, their competitors will pass them up, taking their market share and profits. This development of a competitive advantage will require the support of the entire organization. You will need the entire organization working together to ensure that the desired results are achieved. Business leaders/executives must guard against their organization trying to take the easy way out by adopting the current “FAD” software products, or the latest management “FAD” techniques. This has never given an organization a sustainable competitive advantage as other organizations will follow suit and use the same software, or gimmick. Typically this approach leads to a price war as the products and/or services become commodity items. With no differentiation of these products or services, the customers feel no need to be loyal and will shop for the lowest price. The better approach is to develop your competitive advantage, so that you are unique and can attach and retain your customers.

A competitive advantage will allow organizations to compete under any economic conditions, and or competitive environment. Unique products/services these organizations often have no initial competitors when their products/services are first released, so they are often able to enjoy a higher price. This allows these organizations recover their development costs faster, often gain customer loyalty that will help them remain strong as competitors start offering similar offerings. A competitive advantage will help any organization succeed in the global marketplace.