Jack Welch, former CEO of General Electric, once said, "If you don't have a competitive advantage, don't compete." The continuous question every CEO asks is: How can our company continue to differentiate itself from our competition?
As global competition invades more and more markets, companies are fighting tougher and tougher battles against commoditization. When your company provides a commodity product or service, price and customer service are the important elements in a buying decision.
When you look at your corporation's performance in the marketplace, what companies represent your stiffest competition? List two or three competitors and then answer the following questions:
1. What are they so good at?
2. Is your goal to equal or beat them at that?
3. Is there some other thing that you do, or could do, that they in turn would find hard to compete with?
4. Is it your plan to commit significant resources to such an activity?
Once you get those answers, find out how your leadership would define: your company's primary competitive differentiator today; its best chance for equal or greater differentiation tomorrow; and, the most important business initiatives under way to create that future competitive advantage.
Something is a core competitive advantage if, and only it, it contributes to the corporation's primary effort to create competitive differentiation. If a product or process allows you to differentiate from your competitors, it's "core." For Domino's Pizza, founded and headquartered here in the Ann Arbor Area, delivery is core.
In the early 1960s, Domino's was a small family owned and operated pizza maker that delivered its product primarily to the college students attending Eastern Michigan University and the University of Michigan. The primary demand for the pizza delivery concept grew as families in the area began to follow the college students' lead. Domino's Pizza then expanded to other college towns across the U.S. Being able to deliver hot pizzas fast was then and continues to be core. Now Domino's leadership's focus is on recruiting, training and retaining the best people while implementing effective ordering and delivery processes to continually improve their delivery capabilities.
Source: CIO magazine, May 1, 2006