Competitive Advantage is Capability Based
Dynamic Distinctive Capabilities
Competitive advantage ultimately comes from distinctive capabilities. Sustainable advantage comes from the dynamic regeneration of these capabilities, producing ever greater capabilities. Distinctive capabilities are integral to the development of new business models which produce economic returns. Innovation is part and parcel of strategic management which sustains advantage.
Strategic Management -- Managed Creative Destruction
The strategic management process is about business innovation. This process, executed with commitment and discipline, results in the development of the next competitive business design. Innovation is the creative portion of creative destruction. Innovation, provides new and better value to the market, resulting in the destruction of earlier solutions, i.e. business designs. Management will either become proficient at both their own creation and destruction or will become a victim of the innovation of others.
Sustainable Advantage
A sustainable advantage comes from the development of a deep capability in business innovation, innovating and competing with the whole of the business, not just the parts. This capability is made up of a management competency in strategy creation, business design, strategy deployment, and business creation and transformation. Coupled with the ability to master complexity and understand context, the business innovation capability produces vital advantageous business designs to sustain advantage.
