In the age of Artificial Intelligence, what is a company's true competitive advantage?


The internet has disrupted the business of many middle-man. Digitization has brought greater commodization and driven even more cut-throat cost competition. With future artificial intelligence, the expert services and once privilleged knowledge domanin of many companies will become more easily learnt and available to new entrants.
In the future, what is a company's true source of competitive advantage?
What are the true core competence of a company?
Reflecting on these questions will help a company to better position and survive in the future economy.

Artificial Intelligence
Competitive Advantage
Core Competences
Business Strategy
Disruptive Technologies
Lip Sing Tay
49 months ago

4 answers


Tomorrow and today, a competitive advantage has to be relevant for the customer and difficult to get copied by the competitor.

To process his personal defeat against IBM’s “Deep Blue”, Chess Grand Master Garry Kasparov organized a “freestyle chess tournament” where groups of humans, chess programs and mixed human-AI-teams could join and play against each other. To his surprise, a team of average players, using average chess programs, won the tournament, this based on a superior process. He concluded: “Weak human + machine + better process was superior to a strong computer alone and, more remarkably, superior to a strong human + machine + inferior process.”

IBM's Watson's UK Director Paul Ryan stated at the 2017 CES that every major decision, business and personal, will be made with the assistance of cognitive technologies."

Companies where smart humans and smart machines combine their abilities and work together without frictions reach a better output and due to this, establish a competitive advantage.

Patrick Henz
49 months ago

Even in the age of AI, employees are still the main competitive advantage for a company. You can buy technologies, copy processes and organizations, however the workforce is something that a competitor can't copy in any way

Paolo Beffagnotti
49 months ago
For most of the cases I agree. Exception could be, if a competitor "buy" one or several key-employees. Of course, you cannot buy (copy) culture / knowledge from one day to another, but if you have a couple of months/years, it is possible. - Patrick 49 months ago
I agree that you can "buy" employees but think about this, very rich soccer teams "bought" some of the best players without winning anything. It is a mix of employees and their culture that could provide you with an advantage - Paolo 49 months ago
Right, it applies mostly for sports-team. A good example is that before the 1996 season, not only star driver Michael Schumacher changed from Benetton to the Ferrari-team, but later also his chief engineer Ross Brawn. Other new key employees had been Rory Byrne and Jean Todt. It took several years, but especially thanks to the new employees, computer culture changed and supported later success. - Patrick 49 months ago
Maybe it is a risk for startup-companies that long established competitors would hire one or two key-employees. - Patrick 49 months ago
Good example! If part of a startup I am not sure I will change for a long established competitor, I love challenges and I developed a strong company culture during my career, but this is maybe just my mindset :-) - Paolo 49 months ago
depends on the person. Money and live-time-balance may be motivators ;) - Patrick 49 months ago
agree again, but if due to money then I think the hiring company will miss the plus that a reliable employee could provide with. And at a later stage a new company could hire him/her again with a better offer. it is a never ending story. Live-time-balance is a different story. - Paolo 49 months ago
Also agreed. I would say money would not be the sole-motivator, it could be connected to others like stability, more possibilities in a bigger company, etc. Personal motivators are different from individual to individual. - Patrick 49 months ago
Also money has motivator does not automatically mean that the individual is selfish. There are bills like school, university, etc., which have to be paid - Patrick 49 months ago
Then the next question could be about motivations that make an employee acts as a competitive advantage. To me are commitment, personal drive and optimism - Paolo 49 months ago
A mixture between attitudes and skills lead to a competitive advantage, due to my opinion. A company can foster both. - Patrick 49 months ago
yes the company could use these to build a strong team spirit and boost more employees' potential - Paolo 49 months ago
Agreed. - Patrick 49 months ago

Every company should always identify what their added value is and explore the role of AI in this. The added value can be anything; ranging from simply having customers (to whom AI based products can be sold) and system integration (integrating AI in products).

Ad Bresser
49 months ago

We are not far away (3 to 5 years) from when Fortune 1000 companies will use their Machine Learning Algorithms (AI for the Enterprise) to compete with each other. Which means the companies who have better AI will have a competitive edge. So how do you create a better AI than the competition? The answer lies in AI design components such as business heuristics, feature engineering and a rich diverse data-set. If data is the fuel for AI then the more data you use to train the AI, the better the effectiveness and efficiency of the AI.

So the true competitive advantage in the future will be powered by the humans in the organization who know how to design and build AI that delivers performance metrics that matter in the market - such as increased revenue, reduced cost, improved customer satisfaction, and reduced organizational risk.

Raj Joshi
48 months ago

Have some input?