Creating Higher Demand

Engineering higher demand for the services of scarce resources is actually the most basic of business stratagems.

A competitive advantage becomes more valuable when the number of buyers grows and/or when the quantity demanded by each buyer increases.  Technically, it is the scarce resources underlying the advantage that increase in value.  Thus, more buyers for small airplanes will increase the value of Embraer's (Brazil) brand name and its specialized skills in design and production.  Note that higher demand will increase long-term profits only if a business already possesses scarce resources that create a stable competitive advantage. 

Because so many strategy theorists have mistakenly equated value-creating strategy with "having" a sustainable competitive advantage, they have largely ignored the process of engineering increases in demand.  Engineering higher demand for the services of scarce resources is actually the most basic of business stratagems.

ACTION POINT: Identify your resources that will create a stable competitive advantage and create demand for those.