How Companies Use Tech for Competitive Advantage

Technology is one of the main drivers of competitive advantage today. The emergent technologies such as artificial intelligence, big data and alternative energy are all powerful means by which a company can extract competitive advantage, if the company stakes out a leadership position in the technology. The key to deriving competitive advantage is to be a leader in the field, which means having the people in place to develop cutting edge technology.

An example would be Tesla. The company's cars are beautifully-designed and the marketing has been top-notch but the company's competitive advantage rests on a couple of key technological competitive advantages. First, the company is the leader in developing battery technology. This has not only allowed it to make inroads into the battery market but has also allowed it to have the best range of any electric car. This gives it a competitive advantage over all other electric cars, allowing it to capture market share, and enjoy premium pricing (Fehrenbacher, 2016).

By 2014, the company's batteries were reportedly "years ahead of the competition", which was a critical point of competitive... The company at that point was quite small – and it still is. But as a niche market player, it faced intense competition from established players, and as such needed to have an edge that would allow it to build itself to scale. Being years ahead of the competition in battery power allowed Tesla to establish a clear niche that would give it the breathing room it needs in order to get to scale (Zart, 2014).
But the company recognizes that technological competitive advantage is not something that one can easily sustain, especially in a competitive field like electric cars, with strong established players. Big data has become a critical part of the Tesla strategy. Looking forward, the company sees autonomous vehicles as the future. It has invested a lot of money in recording driving data from its current fleet of automobiles. The result is that Tesla has a much larger body of knowledge from which to draw than the companies – such as Google and Apple – that are also working on self-driving cars (Ahdoot, 2016).

Studying its vehicles also has benefits in the short run. Tesla uses the data that it gathers to enhance each iteration…