CHAPTER 10 Sustainable Competitive Advantage

Introduction

To spend time and money developing a project management methodology or approach because you believe it is the right thing to do is a wasted effort. The better approach is to develop a methodology or approach with the intent of converting it into a sustainable competitive advantage. A sustainable competitive advantage not only placates your customers, it also puts pressure on your competitors to spend money to compete with you.

Sustainable competitive advantages can be determined for individual functional areas rather than for the entire company. As an example, consider Figure 10.1, which illustrates the efforts needed to achieve a sustained competitive advantage in research and development (R&D). As a company advances through the various stages of innovation, the technical risks will increase. The organization must have developed a good approach to the problem of assessing technical risks and must be willing to admit when a project should be cancelled because the resources could be allocated more effectively on other projects. Maintaining a competitive advantage requires a continuous stream of new and/or enhanced products or services. Risk management is an essential ingredient in the evaluation process.

A diagram with three graphs arranged in a stack. The text on the extreme right is SUSTAINED COMPETITIVE ADVANTAGE. The first graph gives a curve for Technical skills required and it is a gradually increasing curve. Skill level is given on the y-axis ranging from Low to High. The second graph gives a curve for Money expended and it is slowly rising curve. $$$ is given on the y-axis ranging from Low to High. The third graph gives curves for Technical risks and Marketing risks. The curves intersect at a point. State of innovation is given on the x-axis and Risk Level on the y-axis. The Risk level ranges from Low to High.

Figure 10.1 R&D efforts for a sustained competitive advantage. 

Source: Reprinted from P. Rea and H. Kerzner,

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