A competitive advantage is what you are better at doing than anyone else. The smarter you can be about developing and promoting your competitive advantage, the better placed your business will be to succeed. It's important to remember that it's essential to differentiate yourself from the competition. For example, are your products more durable than those of your competitors? Do you deliver exceptional customer service while your competitors push self-service options? Are your staff members highly educated, friendly, and proactive? Do you offer a money back guarantee?
Usually the more similar your business is to your competitors, the harder it is to convince customers to choose you.
Competitive advantage can be classified in one of two ways:
While it's tempting to pick an appealing area and make it your competitive advantage, chances are you already have one.
List the areas of your business that you believe are superior to your competitors. For example, these areas might include:
Are you robust in a certain channel or market segment that's growing stronger than the market average? Can you sell higher volumes or gain more market share than your competitors?
Continue brainstorming – and pay specific attention to the following four areas.
Is your business efficient with labour, materials and productivity? Do you have strategic alliances or joint ventures in place? Highly proficient businesses tend to have lower costs, which could lead to a comparative competitive advantage.
Think about the quality of your products or services. Ask yourself:
Customers tend to appreciate products and services that last longer than they expect.
List areas where your business is superior in terms of innovation and creativity. How are your products or services unique? Do you hold an extensive portfolio of intellectual property assets? Highlighting innovation could differentiate your business from its competitors.
Depending on how you position your company's customer responsiveness, it could be either a differential or cost advantage. Some questions you could ask yourself and your staff include:
By now you should have several areas that could be your business's most essential competitive advantage. Next is to analyse your competitors thoroughly so you can either differentiate or be comparatively the better choice.
Keep in mind that relativity and perception are important. If your business is slightly better than your competitors on a vital ingredient in your industry, this can widen year-on-year into a significant advantage.
After brainstorming your list and making sure that your advantages are indeed superior to those of your competitors, develop a crystal-clear marketing strategy around them.
All businesses need a clear point of difference to win and retain customers. With sound, tangible advantages that can be understood and communicated to customers, you’ll increase the chance of gaining new customers.
Using these tips, decide how you'll exploit your advantage in the short-term and turn it into a sustainable competitive advantage over the long-term.
POSTED IN: Finance advice,Growth