So what is your company’s biggest competitive advantage that enables value creation? Is it your people, processes, products, business model or infrastructure? All of these or is it something else? Before you can create a competitive advantage you must understand the infrastructure that supports what it is and how is it created.
The 20th-century corporation was based on an infrastructure that included the electric power grid, roads, railroad tracks, and primitive analog networks like the telephone. This infrastructure was slow to change and it supported all business models, commerce and market dynamics. All businesses used this infrastructure to support the value they created.
The 21st century corporation is based on the infrastructure of the internet whose eco-system is currently redefining all business models, commerce as we’ve known it and market dynamics globally. The internet is fundamentally used by all businesses, markets, governments and society at large to support value creation and consumption.
The Internet precipitates one of those rare occasions in economic history when we must think even more broadly in order to understand the strategic implications of systemic shifts in infrastructure. Most strategist would think of infrastructure as industry structures of markets and organizational systems aimed at creating competitive advantage. These types of “infrastructure” are becoming irrelevant because the larger systemic view of infrastructure has fundamentally changed. You simply cannot create competitive advantage using and thinking in terms of irrelevant infrastructures. Infrastructure is what an organization uses to create and deliver value better than the others (competition).
ReThink Creation Of Competitive Advantage
In a world of rapid change, what matters is not what your competitors are doing but more importantly what you are doing for the customer and how well are you doing it.
Leaders too often think the heart of strategy is beating the competition. Not so. Strategy is about serving an unmet need, doing something unique or uniquely well for some set of stakeholders. Being better than the competition is critical, to be sure, but it’s the result of finding and filling that need better than anyone else, not the goal.
If you measure yourself against current competition you will be measuring against the wrong thing. If a competitor is currently better than you then simply copying what they do and how they do it won’t give you an advantage.
Finding and filling customers (existing and new) current and future needs better than anyone else means you need to learn how to create and deliver value faster than anyone else. The internet provides the infrastructure to learn, create and deliver value. That is if you know how to use it.
You cannot create sustainable competitive value if you don’t know how to use what creates and delivers it.