What are the key drivers of competitive advantage in the digital economy and how can you leverage them?

2 What is stakeholder theory?

Stakeholder theory is a framework that considers the interests and expectations of all the parties that affect or are affected by a business, not just the shareholders. Stakeholders can include customers, employees, suppliers, regulators, competitors, communities, and the environment. Stakeholder theory suggests that a business should balance the needs and claims of its stakeholders, and create value for all of them, not just for the owners.

3 Why are they important in the digital economy?

The digital economy is characterized by rapid change, innovation, and disruption. It is also highly connected, transparent, and competitive. In this environment, competitive advantage and stakeholder theory are essential for survival and growth. Competitive advantage helps a business to differentiate itself from the crowd, attract and retain customers, and increase profitability. Stakeholder theory helps a business to build trust and loyalty, manage risks and opportunities, and enhance its social and environmental impact.

4 How can you assess competitive advantage and stakeholder theory?

One way to assess competitive advantage and stakeholder theory is to use a SWOT analysis. SWOT stands for strengths, weaknesses, opportunities, and threats. It is a tool that helps you to identify the internal and external factors that affect your business or career. Strengths and weaknesses are the internal factors that you can control, such as your resources, capabilities, or performance. Opportunities and threats are the external factors that you cannot control, such as market trends, customer preferences, or competitor actions.

5 How can you leverage competitive advantage and stakeholder theory?

To leverage competitive advantage and stakeholder theory, you need to develop and implement strategies that align with your SWOT analysis. For example, you can use your strengths to exploit opportunities, overcome weaknesses, or counter threats. You can also use your weaknesses to identify areas for improvement , innovation, or collaboration. You can use your opportunities to create new value propositions, markets, or partnerships. You can use your threats to anticipate challenges, mitigate risks, or diversify your offerings. You can also use stakeholder theory to engage and communicate with your stakeholders, understand their needs and expectations, and deliver value to them.

6 What are some examples of competitive advantage and stakeholder theory in action?

Competitive advantage and stakeholder theory can be seen in action through companies such as Netflix and Patagonia. Netflix has an edge in the online streaming industry due to its extensive library of content, user-friendly platform, and subscription-based model. It also utilizes stakeholder theory to create value for customers, employees, content creators, and society by investing in original content, providing flexible work culture, supporting social causes, and reducing its environmental impact. Similarly, Patagonia is competitive in the outdoor apparel industry with its high-quality and durable products, distinctive brand, and commitment to social and environmental responsibility. It also uses stakeholder theory to create value for customers, employees, suppliers, communities, and the planet by using organic materials, promoting fair trade practices, donating to environmental causes, and encouraging customer activism.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?