What gives your company its competitive advantage? Here are some of the considerations and risk factors companies like yours need to weigh to establish a sustainable competitive advantage.
“Today’s executives are dealing with a complex and unprecedented brew of social, environmental, market, and technological trends. These require sophisticated, sustainability-based management. Yet, executives are often reluctant to place sustainability core to their company’s business strategy in the mistaken belief that the costs outweigh the benefits. On the contrary, academic research and business experience point to quite the opposite,” according to the article “The Comprehensive Business Case for Sustainability”, in the Harvard Business Review, by Tensie Whelan and Carly Fink.
Understanding Competitive Advantage
What is a competitive advantage?
When companies develop strategies and characteristics or attributes that make it possible to achieve better results than those of its direct competitors, this is their competitive advantage.
Why is sustainability the key?
The purpose of developing a competitive advantage is really quite simple, yet extremely critical. It’s what arms any business with what it needs to develop and maintain a lead in their industry, space and within their target market. It’s necessary for keeping your clients happy and loyal - the ultimate goal behind a company's service offering. Having a competitive advantage isn’t the same as having a sustainable competitive advantage. Sustainability is key for achieving long-term objectives and realizing a company’s vision. When a company is identified as a leader in a space, it may not necessarily be enough to leverage long-term. Being able to establish your service business as stable, reliable, and reputable can greatly increase the chances of developing a sustainable competitive advantage. Sustainability is also dependant on having the needed people, processes, and technology in place to deliver on promises to stakeholders.
Who should be involved in planning and strategy?
Full buy-in and engagement from a company’s people within various functional areas from the early planning stages is what strengthens a company’s chances of creating a sustainable competitive advantage. There has to be involvement and input from leaders at all levels, and in all areas of your business, right out of the gates. Odds are you’ve hired these leaders because of their high-value capabilities and intrinsic knowledge; these skills and abilities should be harnessed to ensure all strategic angles are explored from the start.
Considerations and Risk Factors
Planning for a Sustainable Competitive Advantage
Your company’s competitive advantage is the pinnacle within the strategic planning process. It’s the protective mechanism that secures your company’s future viability, and it imprints ongoing “success.” All planning activities should be carried out surrounding your company’s sustainable competitive advantage, which acts like the barometer that all projects and initiatives should be vetted against. If projects are initiated and don’t support this, in all likelihood, it will result in wasted time, effort and resources, unless the competitive advantage has changed.
Identifying Key Considerations and Risk Factors
Before you can identify your company’s sustainable competitive advantage, you and your teams need to understand exactly where your company, leadership team, and services rank against competitors in terms of strengths, weaknesses, opportunities, and threats (SWOT). One of the ways companies identify mission critical factors that impact their strategic goals, is to conduct a SWOT analysis. It entails closely analyzing your competitors, and being clear and truthful about your own business capabilities. SWOT analysis can arm your business with the types of information needed to effectively develop a long-term strategic plan that can be successfully executed. Further, it can provide clarity and identify the relevance of any projects that are being contemplated.
- Strengths and weaknesses can come in many forms. It can originate from employees, culture, services, customer support, leadership teams, location, ability to deliver, or other things.
- Opportunities can arise from your location in relation to your target market, an innovative service offering, a newly identified need in the marketplace, employee ideas, and skills, culture, or even a competitor that has dropped out of the market, leaving your company a chance to fill a needed gap. Threats might be direct or indirect.
- Threats can be as a result of newly implemented legislation, tax laws, new competition, internal politics, cyber attacks, changing customer expectations or needs, or many other things.
How Companies can Leverage Technology
How to Identify Opportunities to Leverage Technology
Technology is one of the easiest and fastest sustainable ways companies can advance their objectives and offer significant improvements to their customers, employees and other stakeholders. There are several places to look when trying to identify opportunities to leverage the power of technology. Here are just a few of the areas within your business where technology can help to solidify a competitive advantage.
- Internal processes should always be under review. Carefully examine how your business processes impact service delivery to your customers, the workload balancing, and work-life balance for employees. Technology can significantly simplify how work gets done, or how quickly information and services are delivered - things that are key to establish reliability.
- Business intelligence is a vital part of how companies stay on top of industry trends, identify changes in customer behavior, and company performance. Having the business intelligence and analytics tools to capture and analyze data and make informed decisions that are critical for maintaining a lead over the competition.
- Communication and collaboration tools are a must. Functional, project, and leadership teams need to be able to effectively communicate and collaborate in real-time and on-the-go. Distributed teams are common place, making it necessary to not only have the devices to communicate, but also the right software and security protocols to securely and efficiently make progress.
- Service delivery and support is another critical area for any business. Technology plays an essential role in making sure your customers have access to your services on-time and with the quality standards you intended and they expect. Service delivery is by no means the end, customers want and need to know they will receive the level of support they were promised.
Benefits of Leveraging Technology
The benefits of leveraging technology to advance areas like internal processes, business intelligence, communication and collaboration, and service delivery and customer support are critical in developing a sustainable competitive advantage for your business.
It stands to reason that if your customers, employees, leadership teams, and other stakeholder satisfaction levels have improved through the advancements of technology, that technology has played a pivotal role in developing a sustainable competitive advantage.
Thoroughly examine and re-evaluate all functional areas of your business at last annually and remember, today’s state is not a guarantee for future success. Your leadership team needs to be in a continual state of preparedness as internal and external risk factors may crop up with little warning, if any. Being able and prepared to leverage advancements in technology will allow your business to transform today’s weakness into tomorrow’s sustainable competitive advantage.