Achieving competitive advantage does not solve all problems of the company. It changes however their nature. A company can always be surpassed a16> surpassed by the competition, and in a short time.
From now on, other factors will determine success. The company cannot rest on its laurels and focus on steady growth. If we do not focus on continuous market monitoring, other types of risk will arise, such as price, regulatory, and technological pressure. If an organization considers its current position to be permanent rather than a starting point for further improvement, it will very quickly find itself under pressure from many changes in its environment, as the economy is not a stable environment.
The organization’s ability to sustain the learning process becomes important. Competitive advantage lulls us into complacency, because once the market has accepted our actions, further analysis and adjustments are unnecessary. A management model based on protecting the status quo emerges. To avoid this, it is necessary to constantly monitor results, observe processes, and consistently search for any inefficiencies and imperfections. Maintaining an advantage requires discipline and a willingness to make adjustments, even when, at first glance, everything seems to be going in the right direction.
The second element is continuous diagnosis of market needs. It is important to remember that economic processes can change much faster than a company’s internal structure. An activity that provided consumers with value based on a problem that existed five years ago may now satisfy a secondary or expiring need. Competitors have had plenty of time to develop other, perhaps better ways to meet customer needs. Therefore, market diagnosis must be a continuous process based on hard data.
The third issue is the transition from improvisational management to systemic management. In the early stage of development of a company, what counts is speed of action, flexibility, agility, efficiency in decision-making and understanding of one’s own mistakes and learning from them. understanding one’s own mistakes and learning from them them, and continuous validation of the business model and its individual elements. Increased scale is the enemy of improvisation. This results in unnecessary costs, as well as the risk of lowering quality. Therefore the company must identify these areas, which determine its advantage and in these areas a19> areas introduce clear, well defined standards of operation. Space for independent decisions should be left there, where diversity and flexibility bring better results. The goal of the system is to achieve stability of results, not limiting the initiative of employees.
There also comes a moment when you need to think about allocating surplus capital, which must appear in the organization after building a competitive advantage. The foundation on which the future of the company will be based begins to be built. This is the moment to invest in human capital, in operational processes that improve quality and scalability, and in technologies that are economically justified in the business model.
We must also remember to build organizational resilience, especially when competitive advantage stems from the founder’s experience or talent. In such cases, there may be a need to strengthen processes, and controlling is particularly useful here. Therefore, a mature company should transfer its operating logic to the level of clearly defined processes and team competencies.
Scaling production processes almost always leads to problems with maintaining quality. New dependencies arise and structures grow. In such circumstances, response times can easily be prolonged and problems with the proper transfer of information can arise. Growth can, in fact, be an extremely destructive activity. It is therefore necessary to design scalability in such a way that it protects operational and reputational standards.
The final issue is setting reasonable limits on expansion. Not every market offers opportunities to leverage existing competencies. Simply achieving an advantage in one place does not prove that it can be replicated in another context. Excessive expansion can lead to a dilution of quality and a loss of reputation, which can completely negate previous achievements.
Managing a company after achieving competitive advantage therefore requires greater care and discipline. I know many entrepreneurs who have built quite large companies simply because they were lucky. They had an interesting idea, and the competition overslept. However, this luck may end when it is necessary to systematically build effective structures. That is why it is necessary to have a clear vision of human resources policy and to check whether new staff are keeping up with the company’s philosophy, because it is easy to lose vigilance here. We cannot devote as much attention to new staff as we do to people who have been with the company from the beginning. We must have a vision and a mission, and take care of lower-level employees so that they serve customers properly, because the risk of quality deterioration is very high here.
Competitive advantage is not given once and for all. It is the result of a proper diagnosis of the market and the correct allocation of resources. Each of the above-mentioned areas: observation of the environment, standardization of activities, investments, strengthening resilience, quality control and conscious scale management, should be the subject of constant concern for managers. Only then can the company remain competitive despite changes economic conditions and changes related to internal maturation of the organization.
Beata Drzazga – Entrepreneur, creator, philanthropist, founder of many companies in Poland, including BetaMed S.A. – the largest medical company in Poland providing long-term care services. Owner of Dono da Scheggia, Drzazga Clinic, Global Impact Beata Drzazga, and Beata Drzazga Foundation. She is also the founder of companies abroad: BetaMed International in Las Vegas, BetaInvest in Miami, BetaNest Electronic in Miami, and Viviane Group in Spain. Expert in management, author of business texts for entrepreneurs. Participant in numerous economic missions, including in Nevada, Peru, and Chile.
Source: Przegląd Biznesu