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creating value through competitive advantage

Identifying, building and leveraging core competencies effectively to create competitive advantage

The perception of relative value varies significantly amongst different stakeholders.  A prospective shareholder’s perception of value is likely to take the form of tangible asset based value creation and acquisitions or free cash-flows generation, whereas a potential customer is more likely to be interested in attractive pricing or the differentiated benefits of the goods and services for sale.
Strategies for addressing differing perceptions of value amongst different stakeholder groups are covered in the Understanding and engaging your key stakeholders section.

The business definition of value - the relative performance benefits and attributes obtained by a consumer from a given good or service for each unit of cost payed by the consumer.

The ability of an organisation to create and deliver value to a consumer (and effectively profits to the respective shareholders) is determined by the resources and capabilities of an organisation, and how effectively they are in developing their core competencies into competitive strengths to deliver strategic advantage (refer to figure 2.1).

Effectively understanding what it is that your firm does better than the competition!

How can Activated Logic help?

Discovering the core competencies of your organisation
It is important to be able to specifically and accurately identify the core competencies of your organisation, because it is the core competencies that are almost always the precursors for creating sustained competitive advantage.  Without identifying (or often generating) an inventory of core competencies, your organisation has little prospect of being able to sustainably compete effectively in the marketplace.”

Many organisations, even the ones that are quite successful, often find it difficult to simply identify what it is in the organisations capabilities (refer to Figure 2.1) that is able to give it an ‘edge’ over the competition.  Activated Logic is able to provide a systematic and independent assessment of your organisations core strengths and competencies – the findings are essential for many different functions in your business planning, ranging from fundamental strategy formulation to stakeholder engagement (Understanding and engaging key stakeholders).

Creating sustained competitive advantage
Competitive advantage is often exhibited by a diverse range of firms, however, often the greatest challenge is that this advantage is generally transient due to stochastic impacts from the external environment.  Using the broad methodology outlined in figure 2.1, all core competencies are screened to determine whether they are valuable, rare, difficult to imitate and almost impossible to substitute – the key requirements for sustained competitive advantage.

The critical determination of sustained competitive advantage, combined with a detailed understanding of an organisations internal environment, specifically organisational strengths and the value delivery network, along with the external environment primarily the target market and their expectations, is a powerful platform  from which to create and deliver value.

Sustained value creation through competitive advantage
For an organisation to be able to consistently deliver sustained value to its customers it must be able to design, produce and deliver better solutions to its customers for a better price than its competitors – this is only possible through embedded and inter-organisational sources of competitive advantage.

Activated Logic is able to systematically assemble and align your organisations sources of competitive advantage to be able to optimise and maximise the creation of sustainable value created by your organisation and delivered to your customers (Strengthening your value delivery network).

“Sustained competitive advantage is the basis for above average performance and profitability within an industry”
Michael Porter
Harvard Business School

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