Gaining Competitive Advantage

September 15, 2016

In order to gain a sustainable competitive advantage in today's rapidly changing world, at the core level, you need to look at 3 things - Products, Services, Relationships.

1. Products
Having competitive products means your products are as good as that of your competitors.
Note that many businesses try to build an advantage at this level by having superior products.
However, any advantage gained here will not be sustainable.
This is because even the most intricate products are susceptible to reverse engineering and replication.
The advantage gained here will surely erode within a few months or a couple of years.

2. Services 
An advantage at the services level is relatively easier to build and maintain.
This is because services are more intangible and less price-sensitive compared to products.
However, in order to excel at this level well ahead of competition, it is quite expensive and mostly not cost effective.
Additional service costs money, so the services you provide are largely constrained by the financial parameters of your business.
Service is only a building block to competitive advantage, bringing us to the next level:

3. Relationships
Contrary to the belief that 'keiretsu' and 'guan-xi' are working concepts restricted to the East,
relationships are crucial to all businesses and cultures.
 Relationships are built upon human connection and mutual trust.
At the customer level, it means fundamentally caring about your customers.
In order to be interested in what you are saying or offering, customers need to first know and believe that you care.
Done well, this is the most cost effective and high yielding level.
It is also the key to true sustainable competition advantage.

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