Edit ModuleShow Tags

Laughter of the Hyenas: Is a Competitive Advantage Sustainable?

High-margin businesses naturally attract competition, like hyenas to a fresh kill


If your strategy doesn’t identify what specific markets you compete in and why people will buy from you versus your competition, then your strategy is bad. You’re going to need to rely on luck. In fact, if you’re in a high-margin business, you may not know it but you’re being hunted.

High-margin businesses naturally attract competition, like hyenas to a fresh kill. (If you’re in a low-margin, capital-intensive business, you’re safe from competition, but a foolish investor!)

We used to talk about building a “sustainable competitive advantage” in the strategy world. It’s still a wonderful concept. If you can find a beautiful, deserted island with bountiful natural resources to live on, good on you! But the minute you build your home, the neighbors will start to arrive.

I’ve interacted with about 100 CEOs in the past six months around the topic of strategy. I’ve observed a higher percentage of them being nervous about disruption than I have in the past.

I feel both enthusiasm and empathy for the ones who run those organizations: Enthusiasm, because no one has a lock on disruption and they have an opportunity to change their business model before someone else does; Empathy, because all of their current systems and the minds of their people will resist this.

In greatest danger are the ones who have the largest gross margin and no intellectual property protection. If they’re capital-intensive, it may prevent head-to-head competition, but it may make them more likely to be disrupted by a new business model — by someone who asks, “How can we serve this need differently?”

When people have their antennae up and eyes open and have a process to look at the future, they think about disruptors, grope for a better business model and sleep easier at night. Those who are head down in a foxhole are either naïve or waiting for the laughter of the hyenas.

Edit Module
Todd Ordal

Todd Ordal is president of Applied Strategy®. Todd helps CEOs achieve better financial results, become more effective leaders and sleep easier at night. He is a former CEO and has led teams as large as 7,000. Todd is the author of Never Kick a Cow Chip On A Hot Day: Real Lessons for Real CEOs and Those Who Want To Be (Morgan James Publishing, 2016). Connect with Todd on LinkedIn, Twitter, call 303-527-0417 or email todd@toddordal.com.

Get more content like this: Subscribe to the magazine | Sign up for our Free e-newsletter

Edit ModuleShow Tags

Archive »Related Articles

8 Ways to Throw a Successful Pity Party

Protecting your struggle is a sure sign that you (your identity, beliefs and capabilities) have become captive to the struggle.

Former Engineers, Rocket Scientists and Computer Scientists are the Great Minds Behind Colorado Wine

When discussing their transition from these careers to winemaking, winemakers often report years of education and efforts toward PhDs or climbing the corporate ladder, only to decide later to switch industries to a more agrarian lifestyle.

Fewer Babies – More Pets

While fertility rates in America are declining, the rate of pet ownership is increasing.
Edit ModuleShow Tags
Edit ModuleEdit ModuleShow Tags
Edit ModuleShow Tags Edit ModuleShow Tags
Edit ModuleShow Tags Edit ModuleShow Tags
Edit ModuleShow Tags Edit ModuleShow Tags