Talent
The talent of your people including at the governance and executive management level.Relationships
Relationships with stakeholders including investors, governments, partners, customers and the communities in which you operate.Home Country
The country where you are located. For example, a lower tax rate can be a significant advantage over the competition as it allows you to invest more of your profits back into your business.Processes
Your business processes such as a production line that produces high quality items at low cost.Capabilities
Things that you can do. For example, a firm that is able to consistently design products and services with high perceived value.Organizational Culture
The norms, expectations and symbols of your organization. For example, a firm where people take pride in their work.Brand
How well your brands are recognized and your reputation.Business Model
How you capture value. For example, an ecommerce company that provides a two-sided market versus a firm that sells its own products.Products & Services
The position, quality and unit cost of your products and services. For example, the cheapest organic coffee on the shelves.Costs
Your overhead and unit costs. All else being equal, a firm that spends 5% of revenue on general administration has an advantage over a firm that spends 30%.Productivity & Efficiency
The amount of output you produce for an hour of work or unit of a resource such as energy.Knowledge
Your know-how, designs, methods and information capabilities. Includes things like intellectual property, data and the talent of your people.Scale
A large firm tends to have more brand recognition and lower unit costs due to economies of scale. A small firm can typically change more quickly. Generally speaking, a firm that is large enough to achieve significant market share without becoming slow to change has a significant strategic advantage over both the small and the slow.Capital
Capital including things like land, facilities, infrastructure and equipment. For example, a hotel with beachfront access to a popular beach.Sustainability
Your ability to keep up with the changing values of society and to manage risks to your firm and the greater community.Strategic Advantage vs Competitive Advantage
Competitive advantage is your ability to outcompete in a market. Strategic advantage is your ability to outcompete more generally including your returns to stakeholders such as investors, employees and communities. As such, strategic advantage is a broader term that includes things like your tax rate and ability to manage risks.| Overview: Strategic Advantage | ||
Type | ||
Definition | A position that makes it likely a firm with outperform the competition in the long term. | |
Related Concepts | ||
