We are in a world of competition. The business atmosphere is no exception. A monopoly is a utopian word nowadays. To thrive and succeed in today’s market you have to create more values than what your competitor is providing. Hence building the competitive advantage to grow your business is a must in today’s market.
If you can promote your competitive advantage properly and effectively to potential customers, your business will certainly have a greater chance of succeeding.
Is Having A Competitive Advantage To Grow Your Business A Must?
A competitive advantage that creates greater value for your business is vital as it helps in edging past your rival in your verticle.
There are three kinds of core competitive advantage:
- Comparative advantage also otherwise known as a cost advantage. It is your ability to sell a product or service at a lower price than your competitors.
- The differential advantage when a business’s products or services differ from its competitors. You educate customers to see your products a better value proposition than your rivals.
- Focus or niche advantage, where a business is known for a particular skill or expertise in which they are the very best at that particular domain.
Market positioning, pricing strategy of your business is linked to your competitive advantage. For example, if you are dealing with lifestyle products and eyeing upmarket audience who is looking for the best quality product, you definitely won’t provide discount schemes.
Having a valid competitive advantage will help your business stay competitive – and most importantly, keep your business relevant n the market.
You must identify your competitive advantage
Clear articulation of your competitive advantage will help you in rolling out an appropriate marketing strategy to achieve your goal.
We share some competitive advantage attributes which might help you in formulating strategies to outwit your competitors:
- Expertise – If you have years of experience in the required field, a specialist in your industry, use it to your advantage.
- Uniqueness – do you have a distinctive product or service? You won’t be compared on price or product as you offer something completely different. Play on your uniqueness in your advertising material so prospective customers want to find out more.
- Process – if you run your business more efficiently than others, this may be your competitive advantage. More efficient and streamlined processes could allow you to price lower, deliver faster, or give superb service.
- Relationships – by making your customers feel special and well looked after, you’ll build strong relationships over the long-term. Consumers who feel they matter to a business will return as repeat customers.
Start off by focusing on just one competitive advantage and placing all your energy into perfecting it. Once established, you could think about identifying another competitive advantage to enhance your business’s appeal.
Kinds of Competitive Advantage
There are plenty of different kinds of competitive advantages – take into account what your competitors are great at before choosing which one will give your business the best results.
Having a great location is essential if you’re a retailer. Your competitive advantage could be the amount of foot traffic that passes by your store if you lease or own a building on the main shopping street.
If you don’t have a great location yet, have a thorough look around town to see where the prime real estate is – keep your eye on those locations in case an opportunity arises.
For those businesses that don’t have a great location, they’ll have to think outside the square – may be offering free delivery with online purchases, or getting their products to customers through wholesale or other retail channels is the way forward.
Employing helpful, friendly, proactive staff can be a huge competitive advantage for your business. Make sure your staff is trained well and motivated by:
- Using training programs periodically educating quality standards
- Having incentive schemes.
- Encouraging them to enhance their product or service knowledge.
Products Or Services
By sourcing products or services that your competition is unable to get, you’ll establish a uniqueness about your business.
If your business has developed some intellectual property (IP), it’s important to register it before the competition has a chance to emulate your achievements. Protect it, and make full use of communicating the advantages of it to your potential customers.
Building Alliances/Joint Ventures
The ability to form a strategic alliance or a joint venture is an increasingly vital feature in creating a successful business. It can distinguish your business from the rest.
For example, a petrol pump station can share some floor space to a food franchise, cartridge refilling center, etc. This will lower the overhead costs as well as provide the customer with some more buying options.
Gaining a contract for service can be a huge competitive advantage. For example, a real estate firm that won a contract for building a big project will be able to rely on that cash flow for the period of the contract. Its competitors may not have the same luxury.
User-friendliness on the Internet is a huge attraction for online shoppers. Time is of the essence when purchasing on the web so if your business is easier to navigate and ‘checkout’ than others, you may have a distinct advantage.
- Loyalty – building up loyalty from your customers will help you retain them over time, creating a large customer base and hence an advantage.
- Speed – of service and delivery. If you’re the fastest at satisfying customers, you could use this in your advertising and develop it as a competitive advantage.
- Supply – a strong supply chain can give you an edge with reliability.
- Image – by building a brand that people can trust, you’ll set yourself apart from your rivals.
- Technology – having the latest technology might help you service your clients more efficiently, keeping your business ahead of the competition.
Communicate And Communicate Your Advantage
A competitive advantage only truly exists if your customers perceive the same. Formulate a strategy in your marketing plan so that the customer understands your advantages.
Remember to regularly review your competitive advantage. The market changes, businesses come and go, and your advantage may not be working anymore. Ask your regular customers how you’re doing – the best place to know are you still relevant or not!
We enjoyed writing this, hope you enjoyed it too. Our best wishes to you all, fellow entrepreneurs and readers.