Moving with Speed:

Fast to Market

Owning Your Competitive Advantage

The Key to Flexibility and Speed

"Many companies, acting solely in the interest of short-term expense reduction, have tossed the baby out with the bathwater and ended up outsourcing the only thing(s) that allowed them to get to market fast or first." – J. Jennings and L. Haughton

The Importance of Owning Your Competitive Advantage

You will never lead in innovation or be faster to market than your competition if you depend on other for your core technology. While, according to the 80/20 Principle, and new standard operating procedures (SOP) it is advisable to get rid of and outsource everything that isn't vital to your core business, make sure that, while doing so, you don't "toss the baby out with the bathwater". Every business can and should own one or several competitive advantages – the difficulty is figuring out what they are.

Sustainable competitive advantage is an advantage that allows uninterrupted maintenance and improvement of your enterprise's competitive position in the market. It is an advantage that enables your business to survive against its competition over a long period of time. Owning your competitive advantage will allow you to build it continuously, be more flexible, and eliminate speed breakers.

Acquisitions – an Important  Source of Competitive Advantage

The role of venture acquisitions had evolved as a strategy tool for fast-track technology-led companies. In the current rapidly changing environment and in the era of systemic innovation, where technology is embedded in people and processes, it's often not sufficient to acquire just a technology to get access to a new competitive advantage – the entire company must be acquired. Thus well-planned M&A are recognized as critical to fast-track technology company success – and even survival... More

 Case Study  Charles Schwab's Success Story¹

Initially Charles Schwab, a discounted stock brokerage company, routinely outsourced, like other financial services firms, their back office information technology to other companies. By 1979, Chuck Schwab, the founder of the company, realized that if he was going to quickly grow the company and gain a competitive advantage, he had to own the technology. So, in 1979 he acquired a back-office computer Beta System for US$500,000 – a big bet as at the time, the net worth of the entire Charles Schwab company was only US$500,000.

Given their in-house computing capabilities, owning the technology – their competitive advantage – provided Schwab the ability to:

• Push every known boundary and constantly ask the "what if we could do this for our customers" question without regard what can't be done

• Have the technology and other resources ready by the time people knew they wanted it

• Be faster than competitors in getting to market.

As a result, Schwab started unleashing innovations on the market one after another and became the leader in the new market niches it created. In 1996 Schwab introduced e.schwab, the first-ever online stock trade technology. Within the next three years Schwab became the world's largest financial services firm. It was handling 25% stock trades in the United States, opened 3 million online accounts, and was worth more than Merrill Lynch.