If you’re like most people you have been familiar with the concept of competitive advantage for most of your business life. You recognize that it is desirable and understand that possessing it can benefit you individually, can benefit your team, and ultimately be the difference between just being in the marketplace and being a marketplace leader. Recognizing that true competitive advantage is desirable is the easy part, the more difficult question is how can an individual or firm identify and achieve sustainable competitive advantage?

While there are many ways to proactively engage in the pursuit of sustainable competitive advantage, the most effective techniques to identify these advantages always begin with exploring the potential for exploiting external changes or proactively developing advantage from within.

When we comprehensively evaluate the potential for proactive external changes, we take an in-depth look at the potential impact of several important external factors including the current Political, Economic, Social, and Technological environments as they relate to you and your organization. When these external factors change, many opportunities can appear, that if seized upon, can provide significant competitive advantage for an individual or organization. You can also gain an upper hand over competitors by being more nimble and able to respond to external changes more quickly than the competition.

While exploiting external advantages is crucial, you can’t overlook the overwhelming potential of developing competitive advantage from within. A company or individual that possesses unique internal resources has an edge over its competitors due to the superiority of those resources. The challenge lies in making sure that these resources are indeed unique.

Carefully look at your unique competencies and innovative capabilities and make sure that they really are a source of sustainable competitive advantage by answering answer four crucial questions.

The first question  – Are your products or services valuable?  

If you can answer yes to this question you may have a competitive advantage depending on whether or not you can also answer in the affirmative to the three questions that follow.

If your product or services lack value then what you actually have, is a competitive disadvantage.

The second question  -Are your products or services rare?

If you answered yes to this question you have at least one of the four major components necessary for competitive advantage.

If your products or services aren’t rare then you only have competitive parity in the marketplace.

The third question is  -Are your product or services difficult to imitate?

One of the key characteristics of a product or service that represents a competitive advantage is that it’s not easy to imitate. If it’s easy for your competitors to imitate or replicate your product then you may only have a temporary competitive advantage.

Finally,  are you organized in a way to take advantage of the positioning of those products or services?

If you structured your organization in a way that can systematically exploit the delivery of your product or service then you have an opportunity for competitive advantage. If you can’t, for whatever reason, exploit the fact that your product or service is valuable, rare, and difficult to imitate then what you really have is an unused competitive advantage due to your lack of ability to execute.

Take a few minutes and walk yourself through each of these questions objectively. If you can answer all four of these crucial questions in the affirmative, then and only then, will you know that you have an advantage that is not only competitive but sustainable.