If you invest in a business improvement attainable by everyone else, you have not created a competitive advantage. At most, you have ensured you don’t fall behind and unlocked the capacity to deploy to work on more meaningful innovations.
A timely example is AI-driven efficiency: using LLMs in your day-to-day work is not a defensible competitive advantage because it’s accessible to everyone else; at this point, it’s just something you have to do so you don’t fall behind the competition. (Another example is access to economies of scale.)
Meaningful improvements are hard to replicate (e.g., because they require knowledge accumulated through the years) or do not make sense outside of your business (e.g., they are intrinsically tied to your culture/how you operate).
To continue with our AI example, a more defensible type of efficiency would be fine-tuning your model or harness based on your proprietary data and practices.