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Sustaining a Competitive Advantage is harder then ever.

by Jeremy Schoemaker on March 14, 2013 · 19 comments

Since the 80′s the business world has had its foot on the accelerator and continues shifting gears every decade.

With all the introduction of new technologies the Internet, email, smart phones ect.. it is harder than ever to build a lasting sustainable competitive advantage over your competition. A theory Michael Porter came up with in 1985

In order to have a SCA your business has to accomplish several things.

1st) It has to be Valuable: there has to be a demand for it in the market.

2nd) It has to be Rare: scarce to relative demand.

3rd) It is Non-Substitutable: Costly to imitate, hard to find a substitute that will give you a similar benefit.

4th) It is Exploitable: Able to generate a profit off of.

Think about it, how hard is it to meet all four of those criteria now and days?

It is easy to get two.. maybe three of them but all four? That is hard to do and only several companies are able to do it. I think Disney is a great example of a S.C.A.

The value is undeniable with the amount of fans they have. It is scarce and non substitutable in the essence of the ability to be in the theme park, movie/television, resort and, cruise line industries all at one. Most importantly their ability to exploit all of their products into one bundle backed with the imaginative minds that only Disney has.

It is tough to achieve all four of those in the Internet world especially because of the ability to be substitutable, take Groupon for example. They were a huge hit at first, but we all saw how long that lasted.

It was so easy to imitate local newspapers started to do the same thing on their websites and LivingSocial also made it clear that it was easily duplicated.

If you can find business model that can build a sustainable competitive advantage in this day and age you are a brilliant person!

full disclosure

About the author...

– who has written 2858 posts on ShoeMoney.com.

Jeremy "ShoeMoney" Schoemaker is the founder & CEO of the ShoeMoney Blog, Elite Retreat Internet Conference, & the PAR Program. In 2013 Jeremy released his #1 Amazon Best selling Autobiography titled "Nothing's Changed But My Change" - The ShoeMoney Story. Jeremy currently lives in Lincoln Nebraska with his wife and 2 daughters.


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{ 18 comments }

1 David Melamed

Just to play devils advocate… Do you think an SCA is as important today as it was in the ’80s and before? Would you rather make a quick billion like Groupon, or a steady few million a year long term? I agree its obviously much better to have a sustainable competitive advantage, but is it necessary?

I agree its very hard to find a true SCA today… Especially because something that isn’t substitutable today might become substitutable tomorrow.
However, I wonder if that means that it is becoming easier and easier to make money and start a business/website today.

Maybe the new challenge is for the individual to become “in demand” and be his own sustainable competitive advantage. After all, that already has most of the pieces in place… It just requires providing value.

2 Jeremy Schoemaker

It all depends on how you look at it I guess. I mean think about it obviously if I am able to make a quick billion.. duh! I would gladly do that. But look at Disney, the longer you last you can begin to buy out other companies such as ABC and ESPN like they did. Then your millions turn into billions. So I would argue, while no it isn’t necessary, it never has been, but wouldn’t you rather have an SCA?

3 Samn

Not a comment about your article – but about your comment -

When does it end shoe!!!

What’s wrong with certain people who a driven to never reach a goal!!

I’m guessing your a millionaire? Why are you still working? Why not retire and enjoy the rest of your life with your family?

What drives people to keep trying to make more money – start new companies, keep managing, working.

4 Jeremy Schoemaker

What’s the fun in that? Wouldn’t you rather look back on life and think “damn I rocked that shit!” Just think of all the multimillionaires in the world did they quit after their first million? No..

5 Chuck Faint

Wish I could afford to hang out with you and get some of your knowledge…….been checking out some of your videos and have enjoyed them………..I am too poor though………..although I have desire & willingness to learn………I will just keep plugging away……….step by step……….maybe I’ll get somewhere one day……….I am older than you though so I have a long ways to go and a short time to get there! Chuck Faint- finally got to go to Disney two years ago after waiting a lifetime to do that!

6 Jason

I totally agree with you Jeremy. It is hard to have the upper hand in the business game these days. You can build, sell, and have your business go under all in the same day.

7 Jeramy

I would agree, it is damn near impossible to have a SCA now and days, it is all about the next big thing. Not saying that an SCA can’t be done, it is just harder than ever just like you said.

8 Mervin

I have never hear of the term Sustainable Competitive Advantage until now…

9 Mark

Interesting article Shoe!

10 Jayne

Ehh.. this is debatable.

11 Eliseo

Michael Porter is a smart smart man that is for sure.

12 Robyn

Groupon is the perfect example of how hard it is to build an SCA in the world today, and the thing with Disney is that they have been around forever, they started small and grew to wehre they are.

13 Chuck Faint

Wish I could afford to hang out with you and get some of your knowledge…….been checking out some of your videos and have enjoyed them………..I am too poor though………..although I have desire & willingness to learn………I will just keep plugging away……….step by step……….maybe I’ll get somewhere one day……….I am older than you though so I have a long ways to go and a short time to get there! Chuck Faint

14 Enstine Muki

A lot has really changed and the facilities are almost available to most people. So copying (especially online) is so simple. One only has to use the best of his brains to come out with Internet based business model that can build a SCA

15 faisal

Consultation is one thing which is difficult to replicate.

16 Stuart

We managed to do something like this recently in the hosting industry – one that’s overcrowded with affiliate review websites.

You need to create a tool or something of value that no-one else can offer, once you get a loyal userbase it’s then almost impossibly to replicate what you’re doing.

Feel free to check out the site: http://serverbear.com/

We allow people to run benchmarks on their VPS & compare against 2000 other hosting plans.

17 Dave Wedge

Doesn’t it come down to having better marketing? In most sectors being ‘rare’ is virtually impossible but you can change people’s perception with smart marketing. As individuals we are all unique, its just hard not to copy others and have faith in the fact that people will buy you.

18 Charles Holmes

This is my first time at your blog. I found it on the 2012 best business blogs list. I really like it here.

To leave a comment about your post, I think the best way to make it big in business today is to build remarkable products. Build products that people can’t live without. The days of creating a product and then marketing it to the masses are pretty much long gone. People “tone out” most advertising.

To be effective, you have to be different. To get your SCA you have to look at what everyone else is doing and do the complete opposite.

Great blog. I will definitely be back. Thanks.
Chuck

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