Much has been written about the competitive advantage that IT can bring to an organization. Ironically, even more has been published about the issues surrounding the alignment of IT to the business. The reality is that few IT executives can demonstrate how IT has provided their organizations a competitive advantage in the marketplace. Perhaps exploring the fundamentals related to what constitutes competitive advantages might help these executives to better identify and pursue initiatives that deliver True Competitive Advantages to the enterprise they serve.
First, it is important to understand how an enterprise achieves a competitive advantage. There are two basic types of competitive advantage that can exist; non-defensible and defensibly sustainable.
Non-defensible advantages are those that competitors can meet in short order. There are no barriers to entry and no proprietary elements to the advantage. For example, a company might follow a low margin strategy, hoping to garner a superior share of the market by competing on price. While this can be effective in the short-run, any competitor with deep pockets can follow the exact same strategy. The end result is usually lower profits for everyone but great deals for customers.
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