Whether we are competing in our core business, starting a new business venture, or looking to win a new, large job or project, we need to focus our energies on areas where we have a competitive advantage.
We need to dispassionately assess the competitive landscape and determine where our competitive advantage lies and whether it will truly differentiate us from the competition in the eyes of our customers.
Areas for competitive advantage include (among others):
- Superior product or service capability
- Better understanding of the customer
- Better customer relationship
- Greater talent, passion and commitment
If we are truly superior in these elements, then we should compete. We may not win every battle; but, we will win an unfair share of the spoils.
Avoiding Fair Fights
To have the time and energy to devote to areas where we have an unfair competitive advantage, we need to first of all avoid those areas where our competition has the competitive advantage.
“For business strategy, you want to focus on competitive advantage. But, take it one step further. You want to focus on not going where you have a competitive disadvantage.” Phillip Delves Broughton
Taking it an additional step further, we need to avoid (as much as possible) the fair fights where we cannot differentiate ourselves. When faced with such fair fights, we need to do whatever we can through fair and legal means to create a competitive advantage. If we cannot do that, then we soberly assess whether it is worth all the time and attention (and the opportunity cost) to still compete in the fair fight. Most likely, we will realize that our time and attention is better served if we focus our efforts in other places.
Jack Welch, the former CEO of GE, summarizes it well:
“If you don’t have a competitive advantage, don’t compete.”