The Competitive Value of Data
Data is now the lifeblood of many firms, particularly in the modern economy in which companies tend to focus on their narrow area of expertise while outsourcing the rest. From organizing and optimizing complex multi-vendor production processes to customer acquisition, service and retention – these modern firms are almost entirely dependent on data. Naturally, trying to use data to establish a competitive edge has therefore become big business.
That said, experience suggests it's actually quite difficult for businesses to use data to build a sustainable competitive advantage. In fact, pinpointing examples of companies that have is a challenging task. The Global Markets Institute develops a conceptual framework they call the "learning curve" to help assess the factors that underpin whether a company can use data to create a competitive edge. The authors also include a four-part test businesses can take to determine whether data-based strategies can produce a sustainable competitive advantage for them.