Shift your strategy downstream.

Why do your customers buy from you rather than from your competitors? If you think the answer is your superior products, think again.

Products are important, of course. For decades, businesses sought competitive advantage almost exclusively in activities related to new product creation. They won by building bigger factories, by finding cheaper raw materials or labor, or by coming up with more efficient ways to move and store inventory-and by inventing exciting new products that competitors could not replicate.

But these sources of competitive advantage are being irreversibly leveled by globalization and technology. Today, competitors can rapidly decipher and deploy the recipe for your product's secret sauce and use it against you. “Upstream,” product-related advantages are rapidly eroding.

This does not mean that competitive advantage is a thing of the past. Rather, its center has shifted. As marketing professor Niraj Dawar compellingly argues, advan