It’s the objective that every company would love to achieve – to create a competitive advantage over their rivals in the industry. A competitive advantage is when a company has more economic value than the other companies in an industry. An example of this is Facebook in social media. Even though there are other options such as Twitter, Instagram, and (“cough”,) Google-Plus, Facebook has created a social media experience that leads all others with 1.44 Billion Monthly Active Users.
So, how does a company acquire a competitive advantage? The company needs to make its resources and capabilities better than its competitors’. So, when a leading company boasts its success comes from high quality management teams, high quality technology, and a commitment to excellence, don’t be surprised. Most companies will list these reasons for its success. Therefore, these attributes don’t necessarily lead to creating a competitive advantage.
Instead, it is important to look at some of the intangible resources of a successful company. For example, our course’s textbook listed the janitor of a company could lead to a competitive advantage. By doing their job to the best of their ability, they are creating an environment that is optimal for the other employees to work in. This can motivate the other employees to perform their jobs to the best of their ability too. So, if the successful company is the only one in the industry that has highly motivated janitors, that is an exclusive benefit it has over the other companies that can lead to a competitive advantage.
In Facebook’s case, it was one of the first-movers in the social media industry and had a more user-friendly system. This early start is a prime reason why Facebook has the most users and a competitive advantage over its competitors. However, it must protect its status as the leader in social media users to maintain its competitive advantage. Rather than be complacent with what it has done or is currently doing, Facebook continues to innovate and update its system to incorporate new benefits that its users find attractive.
If you want to make your company or organization better, it is important to identify the overlooked areas or resources that can be improved. In doing so, this is a prime way to gain that edge over your rivals. After today’s lesson, I am definitely challenged to find ways to make the organizations and groups I’m a part of the unique, paramount leaders in their fields.