Competitive Advantage clearly defined

Excellent synopsis. Makes me want to read this book,The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business, by Rita Gunther McGrath. Thanks.

The only question I have is how “competitive advantage” is defined, or not. It seems that a competitive advantage can be derived from any part of a business. Although this may be the case, I don’t think it goes far enough.

I would argue that competitive advantage is derived from the ownership or control of a particular asset. For example, a parcel of land might be more competitive than a neighboring parcels because of soil quality, sunlight, access to water and other such factors. This definition is consistent with the history of the world – most of it anyway – and the political, social and economic institutions that have been created. In other words, the asset owner can not only stake their rights to the property but the state will protect those rights. Based upon this certainty, a property owner can build a business that employs the asset if, and only if, it creates enough value to mitigate all the risks inherent in the business.

Over time, the asset may lose its innate qualities and consequently its competitive advantage or a new way of achieving the same benefit may make it less competitive or even obsolete. As the Fujifilm example illustrates a leader must be aware of these risks and manage them in a timely manner or become a Kodak.

By defining the competitive advantage in this way we take take the discussion from the general to the specific and better understand how leadership, strategy, processes, risks and market combine to create economic value.

The musical key component follow-up

Heard this report on NPR about composer Kimo Williams (Photo: Columbia College Chicago) and how his experience in Vietnam has fed into his music since the Vietnam War.

This experience became his key component!

The musical key component

Today, MocaMedia’s Gwen Alston and I discussed her presentation at Berklee School of Music in Valencia, Spain, to more fully answer a participant’s question about the key component in music. In music, like all the arts, the content creator’s particular style is their key component. Glenn Gould, Tracy Chapman, Stevie Ray Vaughn, Madonna, Alicia Keys, Bruno Mars,…all have their own particular stylistic expression which marks their work.

A couple of years ago, I walked into a club on the upper west-side to hear Shaynee Rainbolt sing. As soon I walked in I heard a familiar voice but it took me a couple of seconds to put a face on it. Then, I realized it my friend Pamela Luss whom I had the pleasure of listening to when she was singing down on the Bowery. A sweeter voice is hard to come by.

An artist’s key component is subtle, yet very distinct, and they use it to make a connection with their audience.

What is your key component? Mine is identifying yours and helping you to build a successful business on it.

Tumblr key component

According to Molly Young, New York Magazine, ‘‘It Was the Biggest Game of Chicken I’ve Ever Seen.’’, Tumblr’s key component is: “easy” and David Karp’s key component: “‘Any successful early-stage tech company needs someone who’s strong on product, someone who’s strong on design, and someone who’s strong on development, and occasionally you fine someone like David, who has all three in the same brain. That’s really, really rare,’ says David Lifson, the G.M. of engineering at General Assembly.”

Grumpy Cat ROKCs!

Katie van Syckle’s article “Grumpy Cat” (Photo: Jeff Minton) appearing in the magazine New York is great example of the ROKC approach.

In reading this article, you can easily identify the key component: “[Grumpy cat’s] permanently cranky face is pure snark. Technically a birth defect,…”, explains van Syckle.

This birth defect creates the competitive advantage: “’Grumpy Cat has more expressive potential than some of the other options do for that kind of sarcastic response to the universe,” says Henry Jenkins, the co-author of Spreadable Media: Creating Value and Meaning in a Networked Culture. “If the culture is going to be snarky, you need images that communicate snarkiness.’”

According to manager Ben Lashes, it has a long-term potential: “I wanted to be really focused on the ones that I thought had a timeless quality to them.”

Which allows him to create a product, licenses of the Grumpy Cat image to select businesses that pay “royalties [that] are typically between 6 and 10 percent of an item’s wholesale price.”

To a receptive customer base “The photo racked up a million and a half views within the first 36 hours.” And, “The Reddit community, for example, asked for T-shirts, while Facebook commenters wanted a plush toy. But everything else, the mugs, magnets, key chains, stickers, calendar, books, belts, trading cards, earbuds, iPhone cases, postage stamps, and note cards, just made sense.”

And lastly, the business is managing risk to the key component using the law: “A sharp legal team is crucial, because Grumpy Cat’s ability to make money depends on protecting her likeness, a problem meme-based celebrities are especially vulnerable to.”

Learn more about how ROKC, Leadership built on the Return On Key Component can help you better understand and manage your business by purchasing a copy on Amazon, today. Available in the US and internationally in both print and kindle editions.

Dancer gets ROKCed

“I like [Alessandro’s] notion that a business has to move as a whole if it wants to successfully evolve/adapt/change. It reminded me of doing pirouettes in ballet, you have to move as one, with all limbs close to the body, if you want to nail a turn!”

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