November 1, 2007
In a capitalist economy, the “holy grail” of business is a sustainable competitive advantage, which is defined by Michael Porter, a Harvard Business School professor, as follows:
“Sustainable competitive advantage (SCA) exists when a company makes economic rents, that is, their earnings exceed their costs, especially including cost of capital. That means that normal competitive pressures are not able to drive down the firm’s earnings to the point where they cover all costs and just provide minimum sufficient additional return to keep capital invested. Most forms of competitive advantage cannot be sustained for any length of time because the promise of economic rents drives competitors to duplicate the competitive advantage held by any one firm.”
The key to sustainable competitive advantage is differentiation. You must offer your customer a difference that is both recognizable by and valuable to the customer. However, it is not sufficient to merely offer your difference in products or services, because in today’s environment, those differences will be copied by your competitors within one or two years. In order for your competitive advantage to be sustainable, you must develop and maintain a unique, customer-focused, business model. Mission-Based Alignment is a step-by-step process for developing and maintaining this unique and “uncopiable” business model. Properly developed and maintained, this new business model will lead to sustainable competitive advantage.
Robert K. Bennett is successfully running his consulting firm, working with clients in the Pacific Northwest to install the powerful business planning and management system – Mission-Based Alignment – in the clients’ companies. Earlier he has rendered services to the telecommunications industry, serving in executive positions in sales, general management and mergers & acquisitions.
William R. Lingar, MBA, has worked with Fortune 50, a technology firm, for six years in Europe. He has worked for commercial and consumer clients in many sectors, including health care, automotive, defense, software, computer peripherals, insurance, chemicals, aerospace, food and municipalities. Culturally adapt through 17 years of integrating virtual, global, and cross-organizational teams; and, strategically accomplished in all phases of the product life-cycle – including repositioning a multi-billion-dollar player from a product-centric strategy to a product-services strategy, William thrives on mission-critical challenges.