This short stack (25 slides of less) will look at what competitive advantage is, why it matters, how it works, and how to develop a source of competitive advantage

1. Understanding and Developing Sources
of Sustainable Competitive Advantage
A Short Stack PPT Developed by the
Center for Strategic Change
at George Fox University
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2. The Center for Strategic Change
at George Fox University
The Center for Strategic Change at George Fox University has a simple mission: To help
college and university leaders succeed.
We will accomplish this mission by serving as both a platform and resource for strategic
innovation. As a platform, we will provide current practitioners an opportunity to present
their ideas and insights to the higher education community.
As a resource, we will provide content in the areas of leadership, visioning, strategic
planning and organizational design.
Questions about this short stack can be addressed to Bob Sevier at
rsevier@georgefox.edu.
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3. The Importance of Competitive Advantage
• Good strategy rests on a solid understanding of some basic truths
• One of these truths is that there is nothing more important to organizational success
than a source of sustainable competitive advantage
• This short stack will provide a brief overview of competitive advantage and then outline a
basic strategy for developing your own source of competitive advantage
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4. So What is Competitive Advantage?
• Here’s the academic definition of competitive advantage: At it’s most basic, competitive
advantage is a condition or circumstance that puts an organization in a favorable or
superior market position
• Here’s a definition that is more pragmatic: Competitive advantage is what makes you
better than the competition in your customers' minds
• Finally, here’s a definition I’ve used when working with clients: Competitive advantage is
something you do/offer that is of value to the marketplace that is not done/offered by
your competitors
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5. Competitive Advantage: Five Understandings
• Porter says that competitive advantage depends on three determinants:
1. What do you produce?
2. Who buys what you produce?
3. Who are your competitors?
• I would add two others:
4. Strategic focus
5. Strategic messaging
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6. What Do You Produce?
• Whether it's a good or service, you must be clear on what you are offering your
customer because if you are not clear it is likely that your customers won’t be clear
either
• Consider, for example what you offer prospective students
 Do you offer them majors or are you offering them opportunity
 One approach would cause you to list all your programs. The other approach would
cause you to tell stories and show data about your graduates
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7. Who Buys What You Produce?
• Determining who your customers are is essential
• As you think about customers, consider the difference between first time customers and
long-term customers
 In other words, think about who persists and graduates from your institution, not
merely who enrolls as freshmen
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8. Who Are Your Competitors?
• One of the major challenges facing college marketers is developing a clear understanding
with whom you really compete for students, donated dollars, and public and media
attention
• In most cases, colleges and universities create a list of competitors that is too large and
ill-defined
• It is much better to identify that small handful of institutions with which you compete
most often
 Chances are these institutions are more like you than unlike you
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9. Strategic Focus
• Once you have identified your source of competitive advantage you need to build your
larger long term strategic focus around that competitive advantage
• Finally, develop strategies so that when your customers think about the advantage you
have identified that they think about you
• You want to own that position in their minds
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Strategic Messaging

10. A competitive advantage is the difference between
noise in the marketplace and buzz
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11. Key Overlaps
• Chances are, your competitive advantage will be found in the overlaps represented be
this Venn diagram
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Your Core
Competencies
Marketplace
Interest
Competitor
Offerings

12. Distinctive Competencies and Competitive Advantages
• Colleges are often confused about the difference between distinctive competencies and
competitive advantages
• A distinctive competency is something you do or offer that is important to you
 As such, they tend to have an inward focus
• A competitive advantage, however, is something you do that 1) Your competitors do not
do; and 2) Is something your customers will pay for
 Competitive advantages have both an inward (we care about it) and outward (our
customers care about it) focus
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13. Necessary Alignments
• Sustainable competitive advantages
must align with your:
 Mission and vision
 Organizational culture
 Budget
 Operational plans
 Marketplace interest
o Your prospective students
and donors must find your
competitive advantage
compelling, intuitive, and
obvious
Mission and
vision
Organizational
culture
Budgets
Operational
plans
Marketplace
interests
Five
Alignments
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14. The Importance of Sustainability
• A true competitive advantage is sustainable over time
• A one-time price cut is not sustainable, but a commitment to job and career placement is
Sustainable
Competitive
Advantage
Hard to find
substitute
High
marketplace
demand
Difficult for
competitors
to acquire or
imitate
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15. Who Has What Competitive Advantage?
Who
• Harvard
• The University of Phoenix
• The Ohio State University
• The University of Southern California
• Notre Dame
Competitive Advantage
•
•
•
•
•
 Did you notice that it is difficult to identify a competitive advantage without also
identifying the competitors?
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16. Developing Sustainable Competitive Advantage

17. Developing Competitive Advantage Four Steps
• The five steps for developing a source of sustainable competitive advantage correlate
with the five determinates of competitive advantage
1. What do you produce?
2. Who buys what you produce?
3. Who are your competitors?
4. Strategic focus
5. Strategic messaging
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18. What Do You Produce?
• Based on data – students
 Why do full pay students attend your college?
 Why do full pay students not matriculate?
• Based on data – donors
 Why do alumni give?
 Why do donors who are not alumni give?
 Why do people only give once?
 What motivates donors to move up the giving pyramid?
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19. Who Buys What You Produce?
• Who are your customers?
 What do they “look” like?
o Define them demographically
o Define them psychographically (Values, attitudes, and lifestyles)
 What motivates them?
 Who influences them?
 What are their media habits?
 What are their unmet needs?
 Who do they view as our competitors?
 Do they exist in sufficient numbers to assure our long-term growth?
• Use these data to create a profile of your ideal customers
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20. Who Are Your Competitors?
• Generally, there are three types of competitors:
 Win from Not really your competitors, you beat them up
 Lose to Not really your competitors, they beat you up
 Split 50/50 Competitors against which you win half the time and lose half the time
• In most cases, you will have the greatest success against the split 50/50 group
• Once you have identified a handful of competitors do a deep dive on each and try to identify
one or more advantages you have over each (Cost? Location? Point of compelling
differentiation)
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21. Strategic Focus
• The fourth step involves centering your organizational purpose around your competitive
advantage
• In other words, how can you allocate existing resources (time, talent, and treasure) to
strengthen your competitive advantage
• In most cases, this will involve revising at least of your strategic plan
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22. Strategic Messaging
• The final element involves getting the word out on your source of competitive advantage
• This includes not only your brand strategy, but your recruiting and advancement
communication as well as your internal communication strategies
• As you think about your messages remember to keep them as audience-centric as
possible
• In addition, stress outcomes more than process. Audiences of all ages want to know,
“What in it for me?”
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23. Remember:
1) Sources of competitive advantage likely flow directly from
lower cost or compelling differentiation
2) Your brand should be built around your source of competitive
advantage
3) Competitive advantages are always validated by the
marketplace

24. Resources:
• Drucker: The Essential Drucker: The Best of Sixty Years of Peter Drucker's Essential
Writings on Management
• Kim and Mauborgne: Blue Ocean Strategy - How to Create Uncontested Market Space
and Make Competition Irrelevant
• Porter: Competitive Strategy – Techniques for Analyzing Industries and Competitors
• https://www.thebalance.com/what-is-competitive-advantage-3-strategies-that-work-
3305828
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