I facilitate a peer group of business owners and the topic of competitive advantage comes up a lot. We have been talking about this for years but when the economy was chugging along, the owners would acknowledge it was important but rebuff any attempts on my part to get them to actually define or develop some.

Not surprisingly, many of these same owners are now discussing ways to cut costs so they can maintain profitability while the economy flounders. I can’t help but wonder what would have happened had they developed some sustainable competitive advantages while the economy was hot. Would they have been even more profitable? Would they have narrowed their focus and developed some real expertise in a few markets that would be especially valuable to businesses in those markets today? Would they have streamlined or invested in their operations strategically so they could maintain their competitive advantage and offer a service that provided a high ROI for customers who are scrutinizing every decision in a struggling economy?
What do you think?