creating a Competitive advantage

At its core, the purpose of strategic planning is to create some form of competitive advantage. As strategic planning facilitators, we are often asked to help clients identify growth opportunities and magnify points of differentiation.

Strategy formation must be dynamic and not static. It changes based on shifting market dynamics. Markets, customers and competitors are fluid, and best-in-class companies pivot in real time.

Regardless of whether a company is a market maker or follower, management teams must recognize disruption, identify customer needs and seize opportunities as they occur.

A foundational element of strategy is situational analysis. Within our work, we try to help clients answer some fundamental questions:

• What are the distinct markets you wish to address?

• Why are they good markets?

• Are they cyclical or countercyclical to markets you are in?

• Are they high-growth markets?

• What is the threat of new entrants or substitute products?

• What is the bargaining power of customers and the pricing power of suppliers?

• What are the barriers to entry?

• What would create disruptive innovation?

• How are markets likely to change?

It is estimated that 90% of the value within a company is derived from answering these questions. Yet management teams spend 5% or less of their time on strategic thinking.

Well-run companies create a cycle for strategic planning and evaluating competitive advantage. Such companies have a special energy, where they beat the competition to the punch, and in the process, create economic value and better engagement with employees who are aligned with a unifying vision.

We operate based on a principal that such decisions should be made based on evidence, in the form of market data. We often help our clients with market analysis to validate assumptions and unearth new opportunities.

For more on how to develop a sustainable competitive advantage, we encourage you to download and read our white papers.