In our fast-paced world where everything happens so quickly, we often forget about the value of quality. Quality products and services can make us stand out from the crowd and help us achieve success.
Companies that provide high-quality products and services will attract customers because they understand that people buy with their hearts as much as they do with their heads.
Customers appreciate being treated right, and they expect to receive excellent service from those who serve them.
If you can successfully market your competitive advantage, your chances of success will be greatly increased.
Importance of Competitive Advantage for Small Businesses
A competitive advantage that adds greater value to your business is essential because it helps in beating out your rivals in your vertical.
Three types of core competitive advantages include:
- Comparative advantages are also referred to as cost advantages. They’re our ability to sell a product at a lower price than our competition.
- Differential Advantage: When a business offers different products or services than its competitors, you teach customers to see your products or services as a better deal than their competitors.
- A focus or “niched” advantage is when a business is known for its skills or expertise in one specific field.
Your market positioning and price strategy of your business is related to your competitive advantage. If you are selling lifestyle items and targeting an upscale customer base, you probably wouldn’t offer discounts.
A strong competitive edge will allow your company to remain competitive — and above all else, ensure that your company stays relevant in the marketplace.
You Must Identify Your Competitive Advantage
Being clear about your competitive advantages will help you roll out an effective marketing campaign to achieve your goals.
Some of our competitive advantages may be useful for you when devising strategies to outwit your competition.
- Experience – If you’ve got lots of experience in the relevant field, then use that to your advantage.
- Unique products or services – don’t compare yourself on cost or quality. Your unique offering makes you stand out from others. Use your uniqueness in your marketing materials so people want to know more.
- If you’re running your company more efficiently than others, then this might be your competitive advantage. You could offer better services at cheaper prices by streamlining your processes.
- Relationships – by creating an experience for your consumers that makes them feel important and valued, you’ll create loyal repeat clients.
To start, focus on one competitive advantage and perfect it. Once perfected, then look for another competitive advantage to improve your business’s overall performance.
8 Types of Competitive Advantage
You may be able to choose from several different types of competitive advantage, but you need to consider what your competitors are good at before deciding which type will help your company the most.
1. Select a Good Location
If you want to succeed in retail, having a great location is critical. You may get an edge from the number of people who pass by your business if you lease or own space on the main road.
If you haven’t got a great location yet, take a good long hard at the best locations in the city. They may be available for rent later down the line.
If you don’t already have a great location, you’ll need to look for ways to get your products into stores. Maybe offer free shipping with online orders, or sell directly to wholesalers or retailers.
2. Hire Personnel
Hiring helpful, friendly, proactive employees can be a big competitive advantage for your business if they’re properly educated and motivated. Here’s how to get there:
- Use training programs to educate yourself regularly about quality standards.
- Having incentive schemes.
- Encouraging them not to use outdated products or services.
3. Products Or Services
By finding ways to source products or services that your competitors aren’t able to obtain, you’ll establish a unique quality about your company.
4. Intellectual Property
It’s important to protect your IP if your business has developed any. Make sure to communicate its benefits to your potential customers.
5. Building Alliances/Joint Ventures
Being able to form a strategic partnership or joint venture is one way to differentiate your business from others.
For example, a supermarket might be able to occupy part of the ground floor of a shopping mall by sharing its parking lot with a restaurant, bakery, convenience store, etc. This would allow the supermarket to save money on rent because they could use less floor area than if they had their own separate shop.
6. Contracts
Winning contracts for services can be a major competitive edge. For example, a construction company that wins a contract for a large project will be able to use that income during the duration of the contract. Their competition might not have that kind of financial stability.
7. Online Presence
Online shopping is becoming increasingly popular among consumers because they want to be able to purchase items quickly and easily. If your store is easy to use and check out, you could have an advantage over competitors who aren’t user-friendly.
- Loyalty – developing loyalty from your customers will ensure they stick with you for longer and create a larger customer group, which could be advantageous.
- Fastest at delivering services and products. You could use this in your marketing and advertise it as a competitive advantage if you’re the fastest at doing so.
- A strong supplier base can help you get better prices for your goods.
- If you want to be successful, you need to build a brand that your audience trusts.
- You need to keep up with current trends in order to stay competitive.
8. Communicate And Communicate Your Advantage
Only a true competitive advantage truly matters if your clients understand why they need to choose you over another company. Make sure to formulate a strategy for your marketing plans so that your client understands your advantages.
Keep an eye out for any changes in the market or business environment. If your competitive advantages aren’t keeping up, ask your customers how they feel about your service. They’re the best people to tell you if something needs to change.
Thanks for reading our post! Hope you enjoy it too. Best wishes to you all, entrepreneurs and readers alike.
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