In the long term, companies will only achieve extraordinary profits, growth, and flexibility if they have some unique, customer valued capability. Typical competitive advantages include:
· Lowest cost structure
· Close working relationship with customers
· Unique intellectual property (patents, trade secrets)
· Management depth and flexibility; resilient corporate culture
· “Winner take all” markets, where first movers take investment resources, or establish standards that latecomers cannot afford to overcome
Ideally, that capability is not easily duplicated by competitors, and is therefore sustainable.
Often, advantage is gained by combining multiple unique capabilities and targeting markets where they are all relevant.
While a competitive advantage may be discovered by accident, it is reinforced and exploited by strategic intent—a purposeful process.