Competitive advantage is a concept that is rapidly disappearing in the context of today’s technological economy.

Historically, the strongest competitive advantage came in the form of operational or technological advantages that were difficult to mimic.

Operational competitive advantages came in the form of entire workflows that were established to improve quality, performance or consistency of a product or service. An example of this is the Toyota Production System (TPS) which incorporated “Just-in-time” production, Kaizen principles, Kanban organization, Six Sigma and a few others. Another example of operational competitive advantage is Southwest Airlines (SWA), everything they did was different. From loading passengers to quick turnarounds & takeoffs, entertaining flight crew and staff, better pricing to providing an overall better customer experience.

Technological competitive advantages exist in the form of patent protections. Firms design a new product with strong patent protections that limit another firm’s ability to design and commercialize the same product. The best known patent protection exists in the biopharmaceutical industry where drugs are afforded lengthy patent rights.

However, with the pervasive nature of technology and the rapid pace of innovation, firms are struggling to maintain competitive advantage. Competitive advantage exists only so long as it takes a competitor to develop similar or improved offerings, systems or processes. In this regard, we believe that competitive advantage is fleeting and difficult to sustain.