Strategy and Sustainable Competitive Advantage

From an academic perspective, the purpose of strategic planning is to provide direction, concentration of effort (focus), constancy of purpose (perseverance) and flexibility (adaptability) as a business relentlessly strives to improve its position in all strategic areas. 数据挖掘工具

Strategy is mathematics and is equal to direction plus focus plus perseverance plus adaptability. At a very pragmatic level, strategy can be understood as finding a way short (the shorter the better) of brute force to accomplish one′s ends. Strategy should be comprehended as the movement from a current position to a more desirable future position but with economies of time, effort, cost, or resource utilization. There is neither elegance nor insight in brute force but there must be both in strategy. 数据挖掘研究院

The eternal struggle of business is the struggle for advantage. The one with more advantage wins, the one with less advantage loses. The purpose of strategy is the building, compounding, and sustaining of advantage. Consequently, business strategy must focus on:

	Building new advantages, which increase customer satisfaction and create distance from competitors.
	Maintaining existing advantages, which increase customer satisfaction and create distance from competitors, and
	Compressing or eliminating the advantages of competitors.

	Cost advantage: the advantage results in being able to provide products/services more cheaply.
	Value-added advantage: the advantage creates a product/service that offers some highly desirable feature/functionality.
	Focus advantage: the advantage more tightly meets the explicit needs of a particular customer.
	Speed advantage: the advantage permits you to service customer needs quicker than others.
	Maneuverability advantage: the advantage permits you to adapt to changing requirements more quickly than others. Being maneuverable permits you to constantly refresh the other types of advantage. It is the only advantage that your competitors can′t take from you.

The lone purpose of business strategy is the nurturing of advantage. Advantage can be realized through infinite combinations of strategic moves.

While there are many ways to build advantage, all advantages can be classified into five generic categories: 数据挖掘研究院

So you win by being cheaper, more unique, more focused, faster, or more adaptable than your competitors in serving your customers. At a minimum, your advantages must satisfy your customers and, at best, delight or excite them. Sun Tzu said:
"The one with many strategic factors on his side wins . . . The one with few strategic factors on his side loses. In this way, I can tell who will win and who will lose." (2) 数据挖掘工具

If an action does not lead to the development of an advantage, it is of no strategic interest. The struggle always has been, and remains, the perpetual struggle for competitive advantage.

The culmination of advantage is the building of a set of sustainable competitive advantages (SCA) for the business. An SCA is a resource, capability, asset, process, etc. that provides the enterprise with a distinct attraction to its customers and a unique advantage over its competitors.

An SCA has seven attributes that are itemized in Table 4. Without a well designed set of sustainable competitive advantages, a business engages in a frantic life and death struggle for marketplace survival; after all, there is no compelling reason for consumers to choose that company′s products or services.

Table 4: Sustainable Competitive Advantage (SCA). 数据挖掘工具

The basic problem, of course, is to determine from where advantages emanate? How do we discover that which will be elegant and insightful so that we may win without using mindless brute force? The answer is that we postulate, analyze, and select strategic actions through strategic thinking.