Sustainable competitive advantage, as defined by Aaker in his book Strategic Market Management, is “an element (or combination of elements) of the business strategy that provides meaningful advantage over both existing and future competitors.” So what does that mean in laymen’s terms? To me a sustainable competitive advantage (SCA) is what distinguishes your company.  That defining characteristic that sets your company apart from your competitors.

However, a SCA can’t just be something that sets a company apart.  The key language in Aaker’s statement further defines what components must be present to qualify as an SCA. Those key characteristics are meaningful and sustainable.  For example, let’s take a look at the characteristic of meaningful as it pertains to netlogx.  Utilizing the practices of Six Sigma, netlogx heads multiple projects that focus on saving the customer time and money.  A slight cost difference is not going to attract customers, but a significant cost savings is. Therefore, by supplying a substantial cost savings netlogx demonstrates the quality of meaningful.

The second characteristic is sustainability.  Companies that demonstrate sustainability revolutionize their product year after year.  They may originally create a product that is innovative and new, but in order to stay ahead of their competitors they continue to design and innovate.  netlogx is built on a culture of creativity and innovation.  Processes are scalable, repeatable and flexible!  Although a process may be utilized more than once, it is revamped or changed to fit the client’s needs.

Now that we have discussed the two characteristics that must be present in order to have an SCA, one must ask the question: but how does one go about creating an SCA?  Aaker’s text defines the four components of a SCA.  These components are:

  • Business Strategies: The way you compete
  • Assets and competencies: The basis of competition
  • Value Proposition: What you offer
  • Product Market Selection and Competitor Selection: Where you compete

Before a company can utilize an SCA they must have each of these four components defined.  netlogx has each of these components identified and continues to modify and change them as we grow.  What I think is interesting to consider is SCAs on a personal level.  What is your SCA?  Is it meaningful?  It is sustainable?  Have you defined it? If you haven’t taken time to think this through, I urge you to do so!