Finding your Strategic Advantage

Perhaps nothing is more important for your business than to establish a solid strategic advantage. According to Peter Drucker, a distinguished Harvard Business School Professor of Strategy, a strategic advantage consists of a series of tradeoffs that make your execution and final product different from your competitor’s. Drucker maintained that companies should compete by being different and not simply by trying to be the best. This is solid advice, especially in today’s day and age in which everything can be outsourced, rapidly cloned or mass-produced for a fraction of American prices. 
As an entrepreneur, no task is more important than ensuring the sustainability of your business. A strategic advantage gives you focus, differentiation and makes everything easier. If you get this right then you’re already ahead of the pack, by far. Setting up a strong differentiator in your industry will alter your brand perception as customers associate you with different things. Are you all about quality? So what about leasing your own plant and becoming a world-class producer? Is your intellectual property what makes you different? So go and patent some of your intellectual portfolio and keep those trade secrets well guarded. In the end, it’s all about your strategy.
People who don’t understand this concept play to be the best. They strive to produce faster and better results without realizing that competitors are doing the same. You see, that’s a zero-sum game that Drucker refers to as ‘playing to be the best’, and you definitely shouldn’t go for that. What you should do is find the core needs that aren’t being satisfied in the market and start polishing a product to satisfy them. At each step of the game you should be making trade-offs that you know your competitors can’t make. This gives you the assurance that, if you grow, then it will be very hard to compete against you.
Then you start molding your company to this strategic advantage. What sort of branding will better convey our advantages? Which corporate structure makes better sense, etc… The more decisions and adjustments you make the better supporter your strategic advantage will be. Then you start creating the second strategic advantage. After several years, you’ll a have a corporate moat. Is very hard to tell how scalable this moat will be or if any of your plans can be adequately executed but that’s why strategy is so hard. You have to revise the results and assess whether your competition can copy your advantage.
Strategy is an ongoing process and it entails a lot of hard work. But nothing will bring more long term value to your company. In the end, your strategic advantage will determine your market value more than anything else.