Sustainable Competitive Advantages

Feb 04, 2022

What are Sustainable Competitive Advantages?

Sustainable competitive advantages are a set of assets, characteristics, or capabilities that allow an organization to meet its customer needs better than its competition can. Sustainable competitive advantages are difficult to duplicate or replicate.

Sustainable competitive advantages answer the question, “What are we best at in our market?” The answer creates a set of 2-3 long-term, unique strengths that a customer values.

Your competitive advantage is what you, your company, or your department does better than anyone else. The sustainable part refers to your ability to continue doing those things long-term. And yes, you can have more than one advantage, and you can also develop advantages. However, you don’t have to possess them all now.

Find Your Competitive Advantages

Download the Free Guide

The Two Traits of Sustainable Competitive Advantages

#1 They are unique to your organization.

Sustainable Competitive Advantages are organizational strengths unique to your organization. These are the strengths that set you apart from your competition. It’s what you do well and is distinctly valuable in your market.

#2 They are valuable to your clients.

Competitive Advantages are traits or strengths important to your clients. If the strength you’ve identified is essential to you but not crucial to your client, it’s not a sustainable competitive advantage. A competitive advantage is a strength or reason your clients choose you over your competition. It must have value to your customer!

What isn’t a Sustainable Competitive Advantage?

We see organizations incorrectly identify competitive advantages all the time. It happens, but here are a few quick ways to know if what you’re looking at is truly an advantage.

Competitive advantages are not a list of your strengths.

Often starting with what something isn’t is easiest. Your competitive advantage is not a list of your strengths. Strengths can become competitive advantages, but they are not just a list of all your strengths.

They can’t be created easily.

Competitive advantages, by definition, are not easy to create or replicate. If they’re easily created or copied, they might be growth opportunities instead. Sustainable competitive advantages are long(er) term in nature, meaning it takes time for a competitor to replicate it.

They are also not competitive advantages of your competitors.

We see this one common mistake again and again in identifying competitive advantages – a competitive advantage is not a strength you have because your competition also has it. Strengths that keep you competitive in your market are essential but are considered table-stakes. Essentially, they are the required strengths to keep your organization at the table in the marketplace.

The 30-Second Sustainable Competitive Advantage Challenge

Here’s the 30-second challenge to determine if you know your competitive advantage. Ready? Go. I meet you at one of the numerous local networking events, and you introduce yourself. “Hi, I’m Bob Jones with ABC Company.” “Hi, Bob. Nice to meet you. Tell me a little about your company. What is your company best at?”

… 29, 30. Time’s up! Could you answer this question in less than 30 seconds, succinctly with clarity?

When you can, you know you’ve identified your competitive advantages.

Formula for a Sustainable Competitive Advantage Statement

Let’s go back to the fictitious networking event from the beginning. We said you need to answer the question “What is your company best at” within 30 seconds. The formula below helps answer that question clearly:

FORMULA FOR A COMPETITIVE ADVANTAGE
A statement that explains what your company is best at.
Your business name + What you are best at + Why
Honda is best at developing precision engines and power trains because its products are the leaders in reliability and technological advancement
Bikram Yoga is best at productizing the yoga experience and practice because it is packaged for franchising
Google is best at optimizing searches for any type of information because it continues to innovate and push technology past what was thought possible
Now it’s your turn…

How to Identify Your Competitive Advantages

Competetive Advantages Venn

We have a comprehensive exercise in this guide and this post on identifying your competitive advantages. Here’s a quick overview of how to identify your competitive advantages:

  1. Identify strengths. From the strengths section in your SWOT, identify your most valuable strengths.
  2. Identify customer wants/needs. From your customer research or customer analysis, identify your customer’s top wants and needs that you can solve.
  3. Find the overlap. From your list of customer strengths, find the overlap between strengths you possess that provide value or solve your customer needs.
  4. Axe the strengths your competitors also possess. Sustainable competitive advantages must be unique. If your competitor also has it, it’s not a competitive advantage. It’s a table stake.

Competetive Advantages Guide

Download the Free Guide

So, Why Do You Need to Identify Your Sustainable Competitive Advantages?

The short answer is this: knowing your competitive advantages helps you build a better, more thoughtful growth strategy. As part of our growth strategy series, understanding your competitive advantages helps answer the question, “How do you win?”.

You need to know what your organization is best at to help build a thoughtful growth strategy. Need help creating a growth strategy? Check out our comprehensive guide and canvas here.

Pro-tip: Think of competitive advantages like your competitive moat.

What are the strengths you have that help keep your organization protected from the threat of competition? Moats are hard to build and penetrate. Competitive advantages are too.

Comments

*

What is 11 + 13 ?
Please leave these two fields as-is:
All fields are required.

Free Guides & Resources

OKRs that work
Setting OKRs that Work

A FREE downloadable guide and canvas to build Objectives and Key Results.

SWOT
SWOT Assessment Guide

A FREE downloadable guide and canvas to complete a SWOT analysis, synthesize it into Competitive Advantages, and then use your SWOT to create SMART goals.

KPIS
Guide to Create KPIs with 100 Example Metrics

A FREE downloadable guide to learn the basics of Key Performance Indicators with 100 example metric sources for ever department of your organization.

SMART Goals
Free Guide for Writing Better SMART Goals

Download the FREE guide to learn how to create goals that have impact in your organization.

Growth Strategy
Free Guide to Build a Growth Strategy

A FREE downloadable guide and canvas to create a growth strategy that clearly defines where you play and how you’ll win.

Goals and OKR Cycle
Goals/OKR Cycle Guide

A FREE downloadable guide and canvas to establish a quarterly rhythm for OKRs and Goals.

OKR Essentials
OKR Essentials Cheat Sheet

Download the free cheat sheet to guide you through building and refreshing OKRs.

Join 50,000 Other Leaders Engaged in Transforming Their Organizations

Subscrbe to get the latest agile strategy best practices, free guides, case studies, and videos in your inbox every other week.

We Believe in Empowering Teams to do Amazing
Work, Consistently and Passionately

Success isn’t a list of flashy logos. It’s about helping anyone who wants to lead a great organization.
If that’s you, join our list of clients – you’re in good company:

Armen EZR Multnomah RHA SEO Monitor
Chobani Cisco Armen KIA Patagonia
Concordia College Davenport Fairbanks St. John's Washoe County School District
Boys and Girls Club BSA Cancer Society Maryland Food Bank Make A Wish
CMPD Long Beach San Francisco City of Sparks Washoe County