Strategy and a Sustainable Competitve Advantage

In the for-profit business environment, “beating the competition” is the name of the game. It may sound easy, but it’s not. It requires time, effort and resources and of course, a solid strategy developed through thoughtful research and careful assessment of the market environment. A strategy should be a map that your company uses as a guide to win and - just as importantly - retain business. And a critical component of any winning strategy is outlining how your company will establish a sustainable competitive advantage over rivals. A sustainable competitive advantage is one that is not easily copied. Companies that have this advantage increase sales and experience low customer turnover as competitors struggle to catch up. Michael Porter, founder of the modern business strategy field and one of the world’s most influential thinkers on management and competitiveness, emphasizes that a true competitive advantage is one that is sustainable against rivals and “can establish a difference that it (a business) can preserve”. [1]

Identifying a Sustainable Competitive Advantage

As mentioned, a strategy is the map that a company will use to win the marketplace. It helps a company to make important choices about what it will do, what it will not do and how it will focus its resources. An important component of any winning strategy is how a company will create a sustainable competitive advantage. So where do you start? Start by assessing your company’s strengths, weaknesses, opportunities and threats (SWOT analysis). What unique set of resources does your company have or need to have in order to establish a competitive edge over rivals? What physical assets (e.g. equipment, human resources), processes, expertise or intellectual capital does your company already possess for this purpose? These are vital questions that will make or break your strategy. Moreover, can these advantages be sustained? Your strategy should be built around reinforcing or establishing higher-order advantages. Lower-order advantages such as low labor costs can be easily imitated by rivals. Higher-order advantages such as proprietary technology, intellectual property, brand reputation and customer relationships are much more difficult to imitate. [2]

Maintaining Your Advantage

We have established the importance of a sustainable competitive advantage as part of an overall strategic plan. We have also discussed that a sustainable competitive advantage is one that is not easily matched by rivals. I must also stress that regardless of how unique a company’s advantage may be, it will only be a matter of time before rivals catch up. It is therefore critical to understand that strategic planning is not a onetime event. It is an ongoing process of evaluation of actual vs. expected results and adjustments to your strategic and tactical plans. At a minimum, you will need to understand how rivals have reacted, what countermeasures they have employed and if have they been successful in neutralizing your advantage in order to determine what changes are needed to your strategic course (if any).

Identifying, establishing and executing on a strategic plan including sustainable competitive advantage requires time, effort and dedication. “Sustainable” is the operative word. Companies must look beyond short term gains to how it can drive top and bottom line growth in the long term. Sustainable competitive advantages are critical to long term growth.


[1] Porter, M. E. (1996). What is Strategy? Harvard Business Publishing. Retrieved from

[2] Porter, M. E. (1985), Competitive Advantage: Creating and Sustaining Superior Performance, The Free Press, NY

#strategy #competitiveadvantage

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