From the several job fairs and student conventions I attended, I knew that it has become a norm for students to ask: “What is your company’s competitive advantage over the other players in the industry?” Whenever this is asked, I notice that the audience holds its collective breath to hear every word that comes from the mouth of a resource speaker or a company representative, much like the way they wait for a Miss Universe bet to answer her clincher question.
The young and aspiring professionals, a.k.a. millennials, have become more and more meticulous (or perhaps, careful) in choosing their potential workplaces. To them, asking about a company’s competitive edge is a crucial item for discussion. This attitude is affirmed by a Forbes article written by Jeff Fromm, which says, “millennials no longer work for you; they work with you.”
On the flipside of this scenario are recruiters or hiring managers asking applicants during job interviews: “What is your competitive advantage over the other candidates for this post?” or “Why should I hire you over the other candidates?”
So how does one respond to the burning question: “what is your competitive advantage?” What is a competitive advantage, anyway?
There are several definitions that pop up when you Google this. But generally, competitive advantage is a condition or circumstance that puts a company in a favorable or superior business position. Simply put, it is the “It factor,” which makes you a winner against the competition.
Rolly Santos, one of my professors at the University of the Philippines School of Labor and Industrial Relations, cites four critical sources of competitive advantage. The first one is economic or financial capability; this refers to your capital, your funding and your financial resources. This means a company has the financial capability to invest in and acquire the best technology, people and resources. Economic capability may also keep your company survive even when your net cash flow from your operations is negative. For this specific source of competitive advantage, money talks.
The second one is technological capability. This one refers to the hardware and software utilized by a company to conduct its operations, plus its presence on the worldwide web. An example would be a sophisticated accounting software that enables the creation of a real-time financial report for the company to reach effective and timely management decisions. Another one would be the online transactions on your company’s website that provide smooth and painless interactions with clients. Proven superior technology creates an impression among stakeholders and consumers that your company has a greater edge than your competitors.
The third source of competitive advantage is marketing and strategic capability, which mainly refers to branding. The company that always comes to mind is Apple Inc. Everybody knows Apple products are expensive, yet everybody still wants to buy it. Why? Because it’s Apple. This is also applicable to Colgate for toothpaste and Xerox for photocopiers; they have almost become generic terms because effective marketing helped them to be etched in the consumer’s consciousness.
The last source would be the company’s organizational capability. This, on the other hand, refers to the people that make up the organization and its distinct corporate culture. Paul Meehan, a director of Bain & Company, defined company culture as essentially the organization’s soul, shaped through successes and setbacks and a mixture of values, beliefs and behaviors.
Google has been globally tagged as one of the companies that have imbibed company culture as a competitive advantage. This is from an interview with Eric Schmidt, CEO of Google: “It is this that I find makes Google’s culture so strong. They seem conscious of culture all the time. Protective of it, proud of it, aware of the responsibility it places on each one of them to do the right thing. There are not many companies who can call their culture a competitive advantage. Most see their culture as holding them back in some way, and are focusing on how to change it. For Google, the cultural challenge is how to preserve the culture they have as they grow.”
If you have knowledge of these sources of competitive advantage, answering “the question” is a breeze. If you are the resource speaker in a career talk, you may choose from any of the four sources and talk about its rationale that makes it applicable to your company. And if the choice you make (whether economic, technological, strategic or organizational capability) is something that appeals to your crowd and something that aligns with their sentiment, then you’re likely to receive a lot of resumes and job application letters in your inbox the following day.
As a resource speaker, I believe that organizational capability is of greater importance than the other sources. The corporate culture that is led and transformed by the leaders of a company, and which the employees clearly demonstrate and enjoy, is a non-replicable formula.
This is supported by Paul Meehan’s statement that, “At a time when it is commonplace for enterprises to stretch around the globe, culture provides the glue that creates trust and a sense of shared purpose.” The distinctiveness of a corporate culture is where people get their motivation to work, which then radiates and translates into productivity.
Elah Andal Perez is a senior manager, People & Culture of P&A Grant Thornton. P&A Grant Thornton is one of the leading audit, tax, advisory and outsourcing firms in the Philippines, with 21 partners and over 800 staff members. We’d like to hear from you! Tweet us: @PAGrantThornton, like us on Facebook: P&A Grant Thornton, and email your comments to email@example.com or firstname.lastname@example.org. For more information, visit our Website: www.grantthornton.com.ph.