By: Rosa Martínez Zapata

THE COMPETITIVE ADVANTAGE

The Holy Grail of Business

The story of the Holy Grail is a fascinating legend that has captured the imagination of many people throughout the centuries. The Holy Grail refers to the chalice or cup used by Jesus Christ during the Last Supper [1]. During the Middle Ages, the legend of the Holy Grail was intertwined with the stories of King Arthur and the Knights of the Round Table; it was said that only the purest of heart could find it. Other versions of the legend place the Holy Grail in Spain and France.

The Holy Grail has been the subject of numerous interpretations and symbolisms throughout history. It has been considered a source of supernatural power and wisdom. The quest for the Holy Grail has become a metaphor for the search for perfection and enlightenment and continues to be a mystery that fascinates historians, archaeologists, and enthusiasts of medieval legends to this day.

Competitive Advantage, on the other hand, and simply put, is any attribute that places an organisation in a superior position to compete, offering greater value to its customers and stakeholders. Just as the Knights of the Round Table tirelessly sought the Holy Grail, entrepreneurs, managers, and business strategists are in constant search for Competitive Advantage. This advantage is the “Holy Grail” of the business world, an element that grants power, success, and longevity to companies that manage to find and maintain it.

Just as the search for the Holy Grail was a never-ending quest for knights, the pursuit and maintenance of Competitive Advantage is a constant task for companies. In a constantly evolving business world, what is an advantage today may not be so tomorrow, driving companies to continually innovate and adapt.

Competitive Advantage is not a myth. It has been rigorously studied, and academics have contributed to a repository of knowledge and recommendations for achieving it. In fact, a powerful business strategy is designed based on the desired competitive advantage, in addition to the fulfilment of the vision, strategic objectives, and operational plan. Strategy is the standard used when making decisions through its policies, procedures, and operating routines.

According to Dr. Michael Porter (1980), there are two basic types of Competitive Advantage: a) by low cost and b) by differentiation.

• Low-cost: Focused on keeping operating costs low allows companies room to manoeuvre in terms of price. By starting with a low price, they can reach a larger market and benefit from economies of scale[2]. Once economies of scale and increased profits are achieved, they can invest in increased capacity for greater reach, beginning a new cycle, now focusing on increasing productivity.
• Differentiation: It helps maintain competitive advantage when it identifies something a competitor can’t easily copy or use. These can be focused on price, image, support, quality, design, or simply lack of differentiation.

When there’s no way to compete on cost or price, another way to seek competitive advantage is to reflect on and identify your company’s current market position and define strategies to achieve more competitive positions (Focus). Bowman’s Strategic Clock[4] is a tool designed for this analysis. The idea is to serve another sector correctly through penetration of existing markets, development of new markets (Blue Ocean philosophy), or diversification as a result of strategies like No-segmentation, Segmentation, Niche or On request.

Specifically, we talk about a diversification strategy when a company decides to have different chains of operations that may or may not be related to the core business.

There are other different alternatives or strategies available for achieving and maintaining Competitive Advantage, which can be classified as generic, primary, and secondary strategies[3]. These include:

Strategies Desk

Selecting the right strategy depends on your target market, your business vision, your capabilities and resources, and the competitors you face. In the pursuit of Competitive Advantage, the leader constantly fights to maintain that advantage. Their competitors fight to reduce it. However, the goal isn’t the fight; it’s the market.

Considering the diversity of strategic options, it is important to have a mechanism that links strategic analysis with tactical and operational execution. Mission-Directed Work Teams™ (MDW™) suggests a model for operationalising a company’s offensive and defensive strategies.

CONSIDERATIONS / OTHER SOURCES OF COMPETITIVE ADVANTAGE

• Keep an eye on your competitors all the time. They’re a good calibration tool for decision-making in your company. Sales representatives are usually the ones who provide information on what the competition is doing.
• Listen to your customers to understand the market and their preferences. This will help you be flexible without losing focus on your strategy and how you plan to achieve or maintain your competitive advantage.
• Remember that Competitive Advantage means superiority in overcoming commercial rivals.
• Don’t lose sight of the medium- and long-term goal when focusing on short-term objectives.
• To be successful, it’s crucial not only to be competitive in terms of products, but also in terms of location, supplier negotiations, selecting territories with less resistance to growth, research and development, and speed in executing the strategy.
• Competent, confident, and empowered talent makes a significant difference in achieving Competitive Advantage.
• Don’t outsource processes that are key to your organisation. Otherwise, you might be giving away your advantage.
• Avoid managerial arrogance and seek a leadership model that guarantees the strategy’s execution over time.
• Be clear about your business model.
• Having a strong financial muscle as a company helps to quickly execute strategic activities.

Managing the present to secure the future.

FINAL THOUGHTS

The search for the Holy Grail and Competitive Advantage in business share a fascinating analogy that illustrates the importance of both concepts in their respective fields.

• The Holy Grail was believed to grant supernatural powers and wisdom. Similarly, a strong Competitive Advantage can transform a company, allowing it to outperform its rivals and thrive in the marketplace.
• Just as only the purest of heart could find the Grail, not all companies succeed in developing a Sustainable Competitive Advantage. It requires vision, strategy, and exceptional execution.
• The Holy Grail has been represented as a cup, a book, or even Mary Magdalene and her lineage[5]. Similarly, Competitive Advantage can manifest itself in various forms, such as cost leadership, differentiation, strategic location, or an exceptional team that makes the impossible … possible!
• In legend, the Grail had the power to regenerate wastelands. In the business world, a strong competitive advantage can revitalize a company or even an entire industry.

In conclusion, Competitive Advantage is the Holy Grail of the business world. A powerful, elusive and transformative element, that can take a company to the top of its industry—as long as it can find and maintain it. This is what I call becoming World-Class.

I believe that like for the Holy Grail, the journey to become a true World-Class company is not for everyone. It requires leaders in the company who have the necessary conviction and stamina to lead the change and embed a continuous improvement mindset. Leaders who dream big to maintain a focus on results by doing the right things well, and who have an unwavering desire to develop competent and confident employees, who enjoy their work because it challenges them in a fun way to be better every day in every way.

Are you one of these leaders? Would you like to be one of them?

REFERENCES

[1] https://es.wikipedia.org/wiki/Grail

[2] Economies of scale describe how average production costs decrease as the scale of production increases. These can be internal economies of scale and external economies of scale.

[3] Porter, M. (1980). Competitive Strategy: techniques for analysing industries and competitors.

[4] Faulkner, D. & Bowman, C. (1995). The Essences of Competitive Strategy. Prentice Hall.

[5] In the book The Da Vinci Code (Dan Brown, 2003), traditional interpretations of the Grail and Christian history are challenged.