The competition in business is becoming more and more intense these days–not only do you need to compete with local companies, but also you need to compete against overseas companies. This is true not only for big businesses but also for the small ones, thanks to the internet. Unless you want to exist in a stagnant state where you are frustrated in your attempts to gain market traction, you need to find some dimension in your product or service offering that has greater appeal to a segment of the market than your competitors.
Some suppliers establish competitive advantage through strong intellectual property protection, while others focus on deep expertise to make a difference. But there is nothing stopping any supplier from spending time with their targeted customers finding out how they can improve their value proposition and where they can make a difference compared to competing products. A competitive difference should be driven by supplier creativity and market evidence. The aim should be to discover areas of need that are unmet by competitors, and to bring forward products and services that tap into that market gap. Only by moving away from competitors and meeting a different need can the supplier improve their price position and margin.
The next challenge is to put this on a sustainable basis. Clearly the regulated IP protection afforded by patents, trademarks, copyright and licenses help, but the supplier should look beyond these to other forms of protection. Customer entanglement, loyalty schemes, long term service contracts, control over distribution channels and supplier inputs can all help shore up a longer term position. The supplier then needs to build an internal process of continuous renewal of competitive advantage and sustainability. Any competitive advantage at a single point in time will ultimately be eroded by new inventions, new entrants and expired IP rights. The smart business builds innovation and the creation of new customer value into their core so that competitive advantage can be sustained.
Figure Out What Your Competitive Advantage, Is essential for the success of your business, so make sure that you find yours.