Competitive Advantage Is a capability or position that allows you to outperform your competition. It is considered the basis for profitability, in other words firms that have no advantages can only compete on Price.
Most Importantly, a Competitive Advantage needs to be Unique to you Only and Not Easily Duplicated.
Competitive Advantage is connected to your Positioning Strategy which in turn is connected to your Price, Features of your Product/Service, Place and/or capability of reaching your Target Market/Customer and your Message in Promotion. In other words, the Competitive Advantage is embedded in your Marketing Strategy and 4P’s.
Not having a Competitive Advantage puts you at a Competitive Dis-Advantage, makes it much harder to compete and impacts your Brand Image Negatively. Basically a Brand without Value.
A Strategy of Lowering the Price results in Loss of Current Profits and Future Profits as well. When You Compete on Price Only, you are forced to Discount the fee you charge for the product/service, thus Discounting your revenues and the Value of your product/service.
Here are some Examples of Competitive Advantage areas your business may want to consider and promote if applicable:
Scale- Economies of scale: Cost advantage you may have when increasing your output.
Variety of Product/Service: Offering wider range of services may give you an edge over competition.
Innovation: How you innovate in your product/service and stay ahead of the competition.
Superior Service: Deliver Excellence in the area of customer service on regular basis.
Culture in Doing Business: Your ethics in dealing with customers.
Quality: Offering a better-quality product or service compared to industry standards.
Reputation: Superior reputation you have for offering value-based service.
Speed to Market: How fast you can get your product/service to the marketplace—-
Know-how and/or Expertise: Special skills that differentiate you from your competition.
Process: Unique System you have in place to provide your service.
Capital Available: Financial capabilities to spend on your expansion.
Risk Management: Strategy vis a vis handling competition and changes in your industry.
Information Technology: Using technology to better serve your customers.
People Retention: Keeping employees for a long period of time, having low turn-over rate.
Intellectual Property Rights: Protection your inventions and investing in your future sales and revenues.
Location: Having an advantage in being close to your customer and servicing their needs.
Strategy/Tactics: Do you have a plan of action? Do you monitor implementation?
How do you rectify deficiencies? Preventive Management!!!
Partners: Added Value in partnering with other businesses to improve customer experience.
Cost Advantage: Running your business more efficiently, offering continuous training to your staff
What We Do with the Above?
The Selection Process, the Implementation and Preserving the Standard is where we come in.
We All Love Statistics, I believe they are a good indicator to learn from. I selected 2 of above examples list, Culture and Customer Service and below you will find some data to refer to:
Culture as a Competitive Advantage
- 94% of executives and 88% of employees believe a distinct workplace culture is important to business success. Via Deloitte.
- Employees’ overall ratings of their company’s qualities — like collaboration, work environment, and mission and value alignment — are 20% higher at companies with strong cultures. These qualities help winning cultures keep employees aligned and motivated. Via CultureIQ.
- 13 companies that have appeared on Fortune’s annual 100 Best Companies to Work For list every year also see higher average annual returns, with cumulative returns as high as 495% instead of 170% (Russel 3000) and 156% (S&P 500). (Source: CFO)
- Companies with strong cultures saw a 4x increase in revenue growth. (Source: Forbes)
- Being named a Best Place to Work is associated with a 75% stock jump. (Source: Glassdoor)
- 82% of respondents to this survey believe that culture is a potential competitive advantage. (Source: Deloitte)
88% of Employees Value Culture, Employees perception of Company 20% Higher due to Strong Culture.
Companies with Strong Culture saw 4 times revenue growth, WOW. What a great Competitive Advantage.
Yes, a Clear Competitive Advantage puts you on the right track, help in increasing revenues and profits and improves motivation in employees Based on Statistics and Research- Not Gut Feeling.
Customer Service as a Competitive Advantage
In Microsoft Research’s “2018 Global State of Customer Service Report,” the customer service confidence statistics may be the most revealing. A full 95% of global consumers reported that the way a company treats them is important to their continued brand loyalty. Regardless of industry, people expect superior service; 61% have even parted ways with a brand when it didn’t meet their expectations.
61% of consumers Will leave the Brand if Not Satisfied with Customer Service. Interesting and Concerning.
Review these three must-haves to evaluate how you can give customers the service they crave.
- Let your customers know you hear them.
- Be there when they need you.
- Find ways to (quickly) deliver the goods/service.
Retailers and E-commerce have two additional P’s to deal with, Personnel and Presentation, which both define the Culture of your favorite store, physical or online, both have customer service (Personnel), and Presentation of Products/Services. Some of their Competitive Advantages from the list above are: Variety, Process, Reputation, Innovation and so on.
All listed examples above of Key Competitive Advantages apply to the Service industry and essential to distinguish yourself from Everybody Else in the Field.
As Jack Welch, ex-CEO of Chrysler, said:
“If you Don’t Have a Competitive Advantage, Don’t Compete”
Basically, what he is saying, you Cannot Ignore your Strength, rather you have to build on it.
An important Value-Added we offer to our clientele is to identify their competitive advantage, define it clearly and build a strategy around it.
All Businesses have a Competitive Advantage, in most cases they just simply may Not know it.
What is Yours? We are Here to Help You Define It.
Very Simple. We Create and Implement Comprehensive Marketing Strategies that Revolve around your Competitive Advantage. It is Our Job to Figure It Out.
How We Can Help You
We help businesses Define their Competitive Advantage, Promote it, Incorporate it in their Value Proposition, and if they do not have one, we Create one for them based on Who They Are, What They Do and Products/Services they Offer.
We Understand Your Needs and Share Your Dreams
Contact Us to increase your Profits and Minimize your Risk