What should a companys highest priority be when creating a competitive advantage?
|
Most companies are either founded on a competitive advantage or can apply certain criteria toward finding their competitive advantage. Much of this can be performed through deduction and a process of elimination. After all, your competitive advantage is, by definition, something your competitors do not have. To find a lasting competitive advantage, look for something that your competitors cannot easily replicate or imitate. Show
Competitive advantages can be found almost anywhere. Some restaurants thrive because of their location. An airline company might have locked in a low-price fuel contract before prices rose, allowing it to price customers away from other airlines. There are car manufacturers that have better production processes than their competitors. It is possible that Berkshire Hathaway's competitive advantage is perfectly unique: Warren Buffet's mind. Coca-Cola, of course, has that secret recipe and huge brand name recognition. Walmart has enormous economies of scale. Take the time to look at the differences between your competitor's goods and services and your own. Conduct customer surveys to see why consumers chose your company. It could be that you are able to offer a comparable service at a lower price, in which case it is time to review your processes to determine where you reap cost savings. Once a potential competitive advantage is identified, find out how rare it is. The easier it is to replicate, the faster competition catches up. Sometimes the competitive advantage is only accessible through a certain target market, with a specific product or service or with a specific location. In these cases, it might be best to focus business strategy toward these areas, highlighting and pressing your advantage. Most companies that are making a profit have a competitive advantage of some kind. After all, something is compelling for consumers to do business with them. Once you find this advantage, focus your company's efforts on heightening it. The goal is to be the very best in your field. What is competitive advantage💬 Definition of a competitive advantageCompetitive advantage is what makes a customer choose your business over another one. By understanding, and promoting such advantage, companies can win a greater amount of market share. A competitive advantage may stem from the user experience — that is, a better, more affordable or more enjoyable product — or it may be another tangible or intangible asset, such as the intellectual property or the customer service team. Examples of competitive advantageCompetitive advantage separates a surviving business from a thriving one, but the source can change from sector to sector and company to company. Get our Mastering Prioritization eBookLearn how to prioritize by making it a simple process, to build products that stand out. Learn more about how to source insight, choose the right prioritization framework and much more. Get the eBook Some common examples of competitive advantage include:
Whilst you may launch into the market with a totally novel idea, it may not be long until rivals catch up. That’s when you may need to revisit what your competitive advantage can be. In the case of sectors with many copycat brands, such as soft drinks, brand and reputation may be the most powerful advantage to harness. How to identify your business’s competitive advantageWhat can you offer to your audience, that none of your rivals can claim to? To identify your advantage, you must map out:
Your competitive advantage lies in unlocking the most engaging benefit, for your target audience, and delivering it in a way that no other business can. It’s possible you’ll have several possible competitive advantages, the one you choose to promote in your marketing and brand communication should be the one with the greatest differentiation and potential to engage. This will help you to get a bigger market share. What is sustainable competitive advantage?Sustainable competitive advantage helps businesses rise above the competition over a long period of time. It helps influence consumer decision making and often results in higher profits. Sustainable competitive advantage refers to assets, characteristics, or capabilities that are unique to a business. They are difficult to replicate and allow a business to meet customer demands better than its competitors. Without a sustainable competitive advantage, you risk your business just being another drop in the ocean. There are three main types of sustainable competitive advantage: differentiation, cost leadership, and focus advantage. What is differentiation as sustainable competitive advantage?Differentiation refers to how a business tailors its strategies to help clearly set them apart from its competitors. This could come in the form of high-quality products, strategic assets, intellectual property, brand identity, and so on. What is cost leadership as sustainable competitive advantage?Companies that can bring down their costs and pass those savings down to the customer have what we call pricing power. This competitive advantage allows businesses to price lower than their competitors so consumers choose their products on the basis of financial value. What is focus advantage as sustainable competitive advantage?Focus advantage is when businesses target a specific section of their target audience to build greater customer satisfaction and loyalty. Sustainable competitive advantage is one of the most valuable things a business can have. It’s a major driver of long-term business and is often the most sought after part of any business acquisition. Competitive advantage frameworkThe most common competitive advantage framework is the VRIO framework. VRIO is an internal analysis tool that can be used to categorize resources based on whether they hold certain traits that are outlined within the framework. This categorization allows organizations to identify which company resources are actually competitive advantages. There are four stages to the VRIO competitive advantage framework, each resource goes through the four stages to help identify if that resource is a competitive advantage.
A resource that is valuable, rare, hard to imitate, and organized to capture value is a long-term competitive advantage. It’s worth keeping in mind that a single resource that offers a competitive advantage is not a guarantee of value or success, and it may only be a temporary situation. The best companies know this and always have an eye on the future. What is the best competitive advantage book?For those looking to learn everything there is to know about sustainable competitive advantage, here are some great books to add to your list. Picking just one is hard!
Get our All You Need To Know About Product Management eBookA comprehensive look at what product management is and how to distinguish what good product management looks like. Get the eBook What is the most important competitive advantage?Companies with strong competitive advantages are the best positioned to succeed within their industries and generally are able to fend off rivals more easily than others. Some of the most common factors influencing competitive advantage include cost control, product differentiation, and customer service.
Which competitive priorities are most important?Competitive priorities are those when addressed add value to the enterprise. Examples are sales, cost, quality, delivery reliability, and after-sales service excellence. As the term suggests, these priorities directly contribute to an enterprise's competitive advantage.
What is competitive advantage priorities?There are five common groups of competitive priorities namely cost, quality, time, flexibility and innovation. Finding the right competitive priorities does not happen overnight, many companies struggle for years when making decisions regarding different competitive priorities.
What are the 4 competitive priorities?It should be noted that each of the four competitive priorities (quality, cost, flexibility and delivery) contributes to improving and sustaining the competitive advantage of a firm, since such priorities are all linked to its corporate and functional strategies.
|
