Building Competitive Advantage
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Identifying your competitive advantage
A competitive advantage is what your business does better than others. The smarter you can be about developing and promoting your competitive advantage, the better placed your business will be to succeed. The most common competitive advantages are:
- Low pricing: You’re able to supply the lowest-cost product.
- Specialization: You service a specific niche market better than other businesses.
- Differentiation: You have the same product or service as others, but you deliver it a different way.
However there are a number of other ways to build a viable competitive advantage, especially when everyone in the same industry has similar prices, products and services.
Eight ways to build
1. Promote your staff
One of your best competitive advantages is your staff. The advantage of having friendly, knowledgeable, proactive staff shouldn’t be underestimated. The key is to make sure your staff are motivated, trained and successful. Help your staff by:
- Establishing clear performance standards.
- Starting incentive or bonus programs to reward staff for their successes.
- Encouraging employees to develop their product or service knowledge and paying for training.
- Learning what other great companies do and adopt any ideas that are relevant to your business.
2. Use your location
Be where your customers are located. For example, if you are a retailer and you don’t have a location that attracts foot traffic, you’ll be short of customers. You should also consider:
- Retail and customer location trends and whether you need to, relocate.
- Marketing your business with business-to-business accounts, free pick-up and delivery, drop-off points or wholesaling through other businesses with better locations.
- Encouraging customer interaction, such as via online communities, attending conferences or exhibiting at events.
3. Offer unique or exclusive products
You have an advantage if you can source products or deliver services that the competition cannot. If you’re competing against larger or similar businesses, establish a reputation for unique products. For example:
- Seek exclusive agreements with suppliers.
- Look overseas to find products or a brand that other businesses don’t carry.
- Find a location, contract, service, agreement or tender that only your business can deliver.
4. Have a great website
A website that is more attractive and easy to navigate than your competitors can be a distinct advantage. Can you create a better, easier online shopping experience? Here are things to consider:
- Focus on great design.
- Be aware of how search engines rank sites and be on the top.
- Use content marketing, such as guides, whitepapers or giveaways to build expertise and to have potential customers make contact.
- Use new technologies and marketing automation to gather, nurture and close any new leads.
5. Become a star
Your own image can be a competitive advantage. No one else has quite your mix of skills, and you can build a character owner image by having your name on as many materials as possible, including:
- Having your name or face associated with the business.
- Speaking at conferences as an expert.
- Becoming prominent in your community by volunteering on local boards.
- Becoming an authority in your field and a spokesperson for your industry.
6. Get to know your suppliers
Being on good terms with your suppliers and their sales representatives is an often-overlooked competitive advantage. You might find that they do most of the market research, develop new products, conduct customer analysis and provide nation-wide branding and advertising that enhances your credibility. A good relationship could provide:
- Better service and support. You might get promotional material, displays and signs or training for your staff in advance of everyone else.
- Better supply and faster delivery.
- Better return policy and customer support.
7. Form strategic alliances and joint ventures
One of the best ways to compete against other businesses is to form alliances and joint ventures. For example, by banding together with other businesses in your industry, you can often gain better group discounts from suppliers than you would if you ordered on your own. Joint venture marketing is another way of sharing advertising costs. By joining together with businesses from the same location, or same industry group you can help increase demand for the industry as a whole.
8. Deliver speed
People increasingly want quick service, so the faster you can deliver your product or service the better. Hold regular staff meetings on how to streamline your business processes and fulfill or exceed customer requirements without sacrificing quality of delivery.
- Contact one of our Business Relationship Managers to see how we can help your business grow.
- Find out what your business does well.
- List your key competitors and outline what specifically you’ll do to challenge them.
- Always look for new competitive advantages. Go to conferences, research online, and look at what other industries are doing.
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