Elevate: The Three Disciplines of Advanced Strategic Thinking by Rich Horwath

Author:Rich Horwath
Language: eng
Format: mobi, pdf
ISBN: 9781118653500
Publisher: Wiley
Published: 2014-03-02T14:00:00+00:00

The position describes a company’s competitive condition, its current place in the market: leader, challenger, or spectator. As you discuss the position, you’ll want to first determine what benchmark or metric you’ll be using to describe the competitive condition (e.g., market share, revenue, sales volume, profit, etc.). This conversation should include some preliminary discussion around why the competitor holds that position. If they are a leader, try to determine what has driven them to that spot: first-mover advantage, superior intellectual property, favored brand, and so on. Once you’ve moved through the remainder of the Competitive Advantage Profile, the answer to why they hold their particular position should become clear.

The second element in the Competitive Advantage Profile is the core competency. As you’ll recall from the previous description in the Coalesce discipline section, a core competency is the primary area of expertise. It’s the collective learning of a group residing in their knowledge, skills, and technology. A core competency is the know-how that serves as the foundation for their ability to deliver value in a competitively superior way. Examples of company core competencies include Berkshire Hathaway’s analysis, Nordstrom’s customer satisfaction, and Disney’s creativity.

The third component of the Competitive Advantage Profile is capability. A capability is an organization’s potential for using its resources to carry out specific activities to create value. Capabilities refer to the competitively relevant activities performed with key resources to drive the strategy’s success. Examples of capabilities include Nike’s brand management, Marvel Comics’ repurposing of content (e.g., transitioning comic book characters into action movie stars), and Nerf’s product development. Keep in mind that capabilities are the competitively relevant activities, meaning those that use resources in a way that creates differentiated value for the business.

Since competitive advantage is defined as “the ability to deliver superior value . . .,” it is important to see exactly how their approach to value and your approach to value match up. The remainder of the Competitive Advantage Profile breaks down the value proposition into its discrete elements. The fourth component is the customer, who the business is specifically targeting with their offerings. The fifth component is the customer’s unmet need or job-to-be-done. The sixth element is the approach the company is taking in how they are going to uniquely fulfill the unmet need or job-to-be-done. The seventh element is the benefit provided to the customer by using a competitor’s offering. And finally, the eighth element is the summarized value proposition, or message to the market on why customers should choose one offering over the other potential options. It’s helpful to begin this exercise by completing the first column with your profile, which can later be used to compare to key competitors in order to identify differences that lead to either advantage or disadvantage.

A more thorough understanding of the dynamic of competitive advantage in your market will play a vital role in crafting future strategy. A study of 2,135 global leaders showed that only 53 percent would describe their firms’ strategies as focusing on the development of advantage versus their competitors.

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