The traditional curriculum of business thinking has taught us that a company should have a sustainable competitive advantage, or as it is also called, an economic moat.
This economic moat, came from a number of different sources. One of the most important ones was a company’s ability to produce the highest quality products. This idea was pretty basic. A company that for some reason is able produce a better product can differentiate in the marketplace and convince customers to buy their product.
However, here is the really interesting question:
This ability to produce higher quality products could be based on a number of different skills and resources:
The company might operate a well organised production facility, or high precision manufacturing plants with skilled workers and outstanding quality controls.
Their production technology or their product technology might be superior.
They might be able to better manage the supply chain, or they may have access to some special resources.
Let’s take a step back and look at these four examples. What do they all have in common?
Notice that as varied as these skills and resources are, they are all united by one thing: