The Difference Between Competitive Advantage 1.0 And Competitive Advantage 2.0
Business on the internet is extremely competitive, much more competitive than the offline business world, in my view. In fact, it is about as close to perfect competition as a market can come. This makes it very difficult to create any kind of a sustainable competitive advantage in the Web2.0 world.
In the world of Web2.0 there are practically no barriers to entry and many of the tools to create a Web2.0 site are free commodities. Everything is out in the open and any one of your competitors can look at your website and copy its design, hire a coder to duplicate its look, use any freeware applications, etc. And anyone, anywhere in the world can quickly start an online business in under an hour, for little or no cost.
In other areas there are obvious exceptions to this, companies like Google have proprietary technologies and have established such a dominant position that it is hard to imagine them being overtaken. But as far as Web2.0 goes it can be considered close to perfect competition. Yet for those who develop sustainable competitive advantage in the Web2.0 world the rewards are tremendous.
In short, the only way to create a sustainable competitive advantage in the World of Web2.0 is through consistent applied creativity and innovation that in some way adds value which causes consumers to give you their attention.
In the world of business, a traditional, or 1.0, competitive advantage is generally defined as a condition that enables a company to consistently earn above average profits. A competitive advantage 2.0 can be defined as a condition that enables a Web2.0 site to consistently earn more attention from the consumer than its competitors.
In the realm of 1.0 competitive advantage, we saw that organizational culture was the only true source of long term sustainable competitive advantage. In the realm of 2.0 competitive advantage, the only true source of sustainable competitive advantage is applied innovation and creativity that arises out of individual culture. This is because of the nature of Web2.0. Web2.0 is concerned with the individual who is at the center of a network, all the while giving and taking value from that network. At its simplest level, adding value means doing or providing something that makes consumers lives better. –Darryl Dosti
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