Achieve Profitable Organization Growth, 3 ways to create Sustainable Competitive Advantage
Most companies are in business to survive, grow and thrive; in other words achieve profitable growth. An organization can achieve profitable organization growth in three (3) ways, to create sustainable competitive advantage. A firm can achieve sustainable competitive advantage by implementing and executing value creation strategy not simultaneously being implemented by any current or potential competitors. For a firm to achieve a state of sustainable competitive advantage it must acquire and control valuable, rare, inimitable and non-substitutable resources and capabilities, and core competencies to absorb and apply those resources to developing its strategy to enhance its competitive position. These factors allow the productive organization to generate more sales or superior margins compared to its market rivals leading to sustained profitable organization growth.
An organization must develop strategic management skills in strategic thinking and leadership allowing the organization to successfully implement and execute its chosen strategy to gain competitive advantage. Managing for strategic success involve making decisions that are strategic in nature and involve managers influencing outcomes by the way they lead and communicate, and through their ability to inspire and encourage others to excel. Strategic management decisions are the means by which management's intentions and ideas are realized. Strategic management decisions link rhetoric (what people say), choices (what people decide and are willing to pay for), and actions (what people do) in shaping the nature and direction of an organization. Success in business is not a random occurrence. It is the result of effective interplay of strategic management, and operations management to continuously improve sustainable competitive advantage through successful execution of value creating strategy.
Managements ability to effectively manage strategy development and execution can be improved by enabling management's capacity to visualize - create mental models of - the strategic and operations management decisions and resulting actions. The strategic engine and operations engine are devices that facilitate such visualization. The Strategic Engine is driven by strategic decisions, judgment, and actions of management that shape the nature and direction of an organization. The operations engine is driven by day-to-day decisions that shape the creation and delivery of customer value.
An organization must develop strategic management skills in strategic thinking and leadership allowing the organization to successfully implement and execute its chosen strategy to gain competitive advantage. Managing for strategic success involve making decisions that are strategic in nature and involve managers influencing outcomes by the way they lead and communicate, and through their ability to inspire and encourage others to excel. Strategic management decisions are the means by which management's intentions and ideas are realized. Strategic management decisions link rhetoric (what people say), choices (what people decide and are willing to pay for), and actions (what people do) in shaping the nature and direction of an organization. Success in business is not a random occurrence. It is the result of effective interplay of strategic management, and operations management to continuously improve sustainable competitive advantage through successful execution of value creating strategy.
Managements ability to effectively manage strategy development and execution can be improved by enabling management's capacity to visualize - create mental models of - the strategic and operations management decisions and resulting actions. The strategic engine and operations engine are devices that facilitate such visualization. The Strategic Engine is driven by strategic decisions, judgment, and actions of management that shape the nature and direction of an organization. The operations engine is driven by day-to-day decisions that shape the creation and delivery of customer value.
Strategic Engine |
Operations Engine |
Strategic engine, is an abstract machine underlying the strategic management process and defines a layered model that captures strategic management decisions. The engine defines an architecture model of organization strategy - a strategy hierarchy which is composed of three (3) levels: corporate strategy, business strategy, and operations strategy. A strategy hierarchy model is company specific, customized to the company's own situation and performance objectives. The Strategic Engine defines how the organization should evolve in order to achieve sustainable competitive advantage leading to long-term success - sustainable profitable organization growth. Competitive advantage as an emergent property of the organization viewed as a system. It is derived from the combination of corporate level comparative advantage, business level differential advantage, and operations level comparative advantage (i.e., economies of scale). The strategic engine relates the three (3) levels of strategy hierarchy through a specific dual integration, built through a vertical orientation: top-down and bottom-up approach. The success of both approaches to generate advantage for the organization is reinforced by functional strategies such as; marketing, finance, IT, HR, sales, etc., that appear simultaneously at all three levels of the strategy hierarchy. The whole engine performance is synchronized (sustained) through the functional strategies that provide resources and capabilities needed to reinforce performance at all three (3) strategy hierarchy levels. The strategic engine will not generate any competitive advantage for the company if it loses reinforcement of proper resources and capabilities from functional strategies. |
Operations engine, is an abstract machine that defines the Operations System utilized by operations management to efficiently manage the organization's operational value chain. The Operations Engine enables an organization to capture and integrate operations events and data from all functional areas, in the value chain, to inform operational management decisions about customers, suppliers, employees, and products. The purpose of the Operations Engine is to efficiently drive the value chain activities, and keep the current activities in the organization moving and functioning at peak levels. The Operations system is utilized by operations management to provide the best match of supply capacity with customer demand. The operations system aligns organizational distinctive competencies and effective capacity with demand to ensure efficient and cost effective creations and delivery of value. The objectives of the operations system (value chain) are to create and deliver products of value to customers. Operations management is concerned with operational decisions about day-to-day decisions about all input-transformation-output processes in the organization. Operations decisions are based on facts and data regarding the events and do not require much of business judgment. Operations decisions allow the organization to efficiently manage the current value chain of activities that drive the creation and delivery of customer value, and achievement of operational objectives. The value chain activities include production and supply chain activities as well as business function areas such as marketing, finance, sales, HR, and customer service. |
The strategic engine model is useful for managers seeking to understand, safeguard and enlarge their company's potential sources of competitive advantage. The Operations Engine supports operations managers' decisions in efficiently managing the day-to-day activities of the organization across functional areas to achieve performance efficiency in creating value at reasonable costs.
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