Growing or improving the competitive position of an established business has been the focus of a number of events and initiatives we have been involved in recently.
For many businesses the ability to produce, provide or deliver something either on par or slightly better than their competitors can all too often be what they perceive as their competitive advantage. The mediocrity of being slightly better, in the absence of a true competitive position, being their all in terms of a unique selling point.
It can also be the case, without a true understanding of the relative and real competitive position, that a business can be in self denial, even deluded about its competitive advantage. Often the service given or the product provided falls short of that of a competitors and customer demands are not really known and therefore not met.
Whilst a lot of businesses deem a competitive advantage to be doing or providing something at a lower cost than their competitors, this is only a true competitive advantage if you run your business based on a cost/price orientated model. Such businesses, many of which operate in retail as low cost operators, focus primarily on driving down costs to maintain margin and to attract business.
Other businesses seek to differentiate themselves by how they service their customers, whether it is a focus on high level service or a very efficient and timely service. Such contrasting examples might be a luxury hotel where often a premium is charged or a well established hotel chain which guarantees you a good night’s sleep.
For those that produce or manufacture something a competitive advantage often comes about by producing something better either in its fabrication or functionality and that performs better than its alternatives. Ultimate success in achieving this can lead to a product or brand of choice or aspiration. Perhaps one of the best illustrations of this is the leading brands in the mobile communications and gaming sectors.
In the service sector or people oriented businesses a competitive advantage is often gained through the level of expertise and knowledge offered by individuals or simply the way in which customers are treated and handled by staff. Invariably such an advantage is more reliant on recruitment, training and development of personnel.
Perhaps often overlooked or perhaps more synonymous with branding is the role that effective marketing communications and promotional activity plays in gaining a competitive advantage. With careful spend and tactical use of marketing tools a business that spends more or carries out its marketing in a less conventional way can gain or realise the benefits of a true competitive advantage.
Overall a competitive advantage is gained when you outperform your competitors time and time again. This is achieved by truly knowing your customers, understanding and even pre-empting their needs both now and in the future. This results in becoming the leader in your field and your competitors becoming followers finding it hard to keep up, let alone catch up.