To be a successful organisation or running brand, it’s often to provide an affordable product or service that your company provides that competitors in the same space aren’t available to provide. This unique, affordable, and cheap product offering is a major part of the competitive advantage. Having an effective and competitive advantage strategy can help spike sales by letting your audience know that your organisation can provide services or products at affordable prices.
In this write-up, we will explain what is a competitive advantage, how to draft one, and how a competitive advantage strategy can advance your entrepreneurial and business success.
What is competitive advantage?
A competitive advantage is a perspective a business generates by providing customers with something unique, affordable, and cheap from items their competitors may offer in the marketplace.
The main impact of implementing a competitive advantage is to influence differentiation strategy. Moreover, an organisation will usually complete this by analysing its products, the financial situations of its target customers, and the entire valuation it can provide.
Benefits of Creating a Competitive Advantage
Competitive advantage has several benefits that help you develop a unique and competitive niche within your industry. Here are the possible benefits of creating a competitive advantage that can help you;
Reduced Price
A competitive advantage’s primary objective is to allow a company to compete in the market with something other than lower prices. For instance, a beauty salon may differentiate its services by lowering its prices. Although its competitors have versatile services, they couldn’t provide the customers with the price or fees they want from a suitable company.
Unique Products
The benefit of competitive advantage is that it builds on the unique qualities of the product. Your company may create a list of characteristics.
Better Profit Margins
When services are competitive and turned into high-quality, cheap ,and affordable products, it offers more opportunities for higher profit margins.
How to Create a Competitive Advantage?
Businesses looking to build a broad or focused competitive advantage will need to produce or design extremely cheap or affordable products or services that create increased availability for their target customers. There are several ways an organisation can create a competitive advantage along with a clear support of differentiation strategy for a single product or a company as a whole.
Decide Expertise In Your Business
It would help if you had an idea of what you want to be known for from your business. You’ll need to analyse how to succeed in a business and the business’s weakest and strongest target points. with it, you will be able to carry a narrow competitor to your business
Research Your Target Audience
With accurate research, you will be able to set proper offerings of your company’s product or service. It will also inform your selection of competitive advantages to make your expertise more appealing. For instance, you organise a survey of your recent customers to know how cheap or affordable they want the product/service.
Develop Competition
This step is important to find things that make your product inexpensive. Each advantage may be different, so try noting down your competitors and then create small subsections that narrow them down. Here are some common competitors,
- Price
- Image or Reputation
- Product
- Seller Behaviour
- Distribution
- Draft Your Businesses Unique Story
When you tell your business story that sets you apart from the competition, it may automatically assist you with your competitive advantage strategy. Incorporate your mission, values, and vision, and you can craft an overall story on what makes your business unique.
Meanwhile, the company’s website bio can be a suitable location for your business’s unique story
Generate a Brand Impression
Elevate your competitive advantage and create a brand image by ensuring an affordable and promising quality/service. Try to be innovative and brand again, if necessary, to capture new clients and customers within your target audience.
Examples of Competitive Advantage
While some of the best companies adopt the types of competitive advantage, their types include manufacturing, space travel, and medicine. While some of the companies practising competitive advantages are,
Amazon: Customer Satisfaction
One of the strategies adopted by the conglomerate to rise above competitors is cost leadership. With the primary focus on customer satisfaction, Amazon’s founder, Jeff Bezos, found that the major concern for their customers is the delivery fees. Hence, he decided to waive the delivery fees for customers purchasing above $25.
Walmart: Cost-Leadership
Another known company, Walmart, depends on bulk sales and the metrics of purchase; hence, the company offers a lower price and gets the highest sales volume.
Tesla: Technological Superiority
The American multinational automotive company, Tesla, adopts new technologies and updates itself according to the generation. Known as one of the few multinational companies to adopt competitive advantage, in addition to new technologies, Tesla’s other features are unique designs and innovations.
Starbucks: Quality
Last but not least is the American food and beverage company Starbucks, which always upholds quality. Hence, with a superior quality and eye-catching design store, it provides the best go-to place for working individuals.
Netflix: Cost Leadership
Another settling instance of competitive advantage is Netflix, which utilises cost leadership to provide its users with affordable subscriptions and endless content. Meanwhile, owing to the increasing number of mobile viewers in India, the streaming giant went on to introduce a subscription plan available only for mobile subscribers.
Final Words
In essence, you need to work on your organisation and keep incorporating the latest trends in your services/company. As mentioned by a leading and experienced industrialist, the key to making yourself unique is continuous innovation and experimentation. If you win on adapting client’s requirements and changing environment as the company’s services, you will gain a company advantage on your company. Besides, to learn more about competitive advantage, read our detailed guide explaining to you everything related to the topic.
