07 · Demonstrate

Distinguish a claimed advantage from a demonstrated advantage

DECISIONS SUPPORTED

Which source of value withstands substitutes, imitation and time?

  1. 01Invest in a capability
  2. 02Protect a resource
  3. 03Drop a fragile claim
  4. 04Monitor the erosion of an advantage

ORIGINAL ASSET

Advantage diagnostic

Classifies an advantage as claimed, demonstrated, temporary or potentially defensible.

INPUTSValueRarityImitabilityOrganisationEvidence
OUTPUTSStatusDependenciesDurabilityErosion rate

Move from a claim to an observable mechanism

A capability is advantageous only when it improves an outcome valued by the market relative to alternatives. Evidence links an activity, a mechanism, a comparable measure and a period; it must not confuse internal competence with customer preference.

  • Customer outcome
  • Relative gap
  • Mechanism
  • Observed period

Qualify each piece of evidence without averaging away the unknown

Each link has its own status: demonstrated, hypothesis or unknown. A rare resource without appropriate organisation, or a stated preference without observed behaviour, remains a hypothesis. Critical gaps block the conclusion instead of being absorbed into an average score.

  • Demonstrated
  • Hypothesis
  • Unknown
  • Refusal condition

Treat erosion as a scenario

The half-life displayed by the tool is a teaching scenario based on an entered rate. It is neither a forecast nor an observed duration. The decision should track real signals: imitation, substitution, a fall in relative price, lost preference or a dependency becoming critical.

  • Erosion assumption
  • Observable signal
  • Review threshold
  • Possible action

EVIDENCE OF ADVANTAGE

Link the capability to a customer or economic outcome

An internal strength becomes strategically relevant only when it produces a result valued by a defined customer or improves an economic outcome compared with credible alternatives. Document the activity system, the mechanism that creates the difference, the metric, the comparison set and the observation period. Employee confidence, brand familiarity or isolated performance do not by themselves prove a market advantage.

  • Defined customer
  • Observable outcome
  • Credible comparison
  • Dated measure

Move from a claimed strength to a mechanism that can be observed and reviewed.

Test defence, dependencies and erosion

Rarity is not enough. Examine substitution, imitation, access to complementary assets, organisational fit and the dependencies that could transfer value to another actor. Mark every link as evidenced, assumed or unknown and identify the weakest link. Then define observable erosion signals, such as price compression, declining preference, faster imitation or loss of distribution access, together with a threshold and response.

  • Substitution
  • Imitation
  • Critical dependency
  • Erosion signal

SOURCES AND FOUNDATIONS

Review conditions remain part of the decision.

GO FURTHER

Review conditions remain part of the decision.

01

Distinctive capabilities

02

Data

03

Network

04

Distribution

05

Learning

06

Barriers to imitation

DECISION QUESTION