Henry Ford once said, “Competition whose motive is merely to compete, to drive some other fellow out, never carries very far. The competitor to be feared is one who never bothers about you at all, but goes on making his own business better all the time. Businesses that grow by development and improvement do not die. But when a business ceases to be creative, when it believes it has reached perfection and needs to do nothing but produce – no improvement, no development – it is done” (Newsworthy Quotes, 1999). Many wonder whether these thoughts hold true in today’s economy.
In my view, Henry Ford’s statement to remain vigilant of the competitor who is focused on making his own business better all the time, rings true, even in today’s economy. This is an effective strategy in and of itself because the firm is focusing their energy on producing efficient competencies and capabilities to achieve high performance outcomes. Greenwald and Kahn (2005), purport that formulating effective strategies is the key component to the success of any business. They further state that for the last half century, strategic management has been a significant concern in the corporate arena. In a battlefield, for example, strategy is the component used to achieve victory. The perspective that strategy can equate to victory, has become, in fact, such an important element that many companies develop in-house strategic planning units or hire outside consultants to help guide the process (Greenwald & Kahn, 2005). Every business, regardless of location, reputation, size, or field, faces a certain level of business competition that will require some kind of strategic planning to help them gain a competitive advantage. Without it, a firm is more likely to experience difficulty in their journey trying to achieve successful outcomes.
The truth is, understanding the importance of a competitive advantage is the key to creating effective business strategies. Coulter (2010) reminds us that creating a competitive advantage is how companies differentiate themselves. In other words, companies can establish precedence by performing higher than other firms, for example, or providing products that are unique. In short, their capabilities and performance outcomes are distinguished and stand out as different than others.
On Wednesday’s post we will take a closer look at the components that make a firm unique and effective. Until then … keep working on staying organized!
“What lies behind us and what lies before us are tiny matters compared to what lies within us.” — Ralph Waldo Emerson
Coulter, M. (2010). Strategic management in action (5th ed.). Upper Saddle River, NJ: Pearson Education, Inc.
Greenwald, B., & Kahn, J. (2005). Competition demystified. New York, NY: Penguin Group.
NewsworthyQuotes. (1999). Business Competiton. Retrieved April 27, 2014, from http://www.studypool.com: https://www.studypool.com/questions/7858/business-competition-1