How to Build a Competitive Advantage
Consider five aspects of a small company:
- Products they sell
- Service they provide
- Pricing they offer
- Way they sell
- Values to which they are committed
Also consider the Company’s Core Competencies:
- Unique set of capabilities a company develops in key areas, such as superior quality, customer service, innovation, team-building, flexibility, responsiveness, and others that allow it to vault past competitors.
- They are what a company does best.
- Best to rely on a natural advantage (often linked to a company’s “smallness”).
Unique Products or Services
Certainly one of the major competitive advantages that any business can establish is a unique product or service that competitors cannot provide. Do the products/services:
- Save customers time?
- Save Energy?
- Protect the environment?
- Provider greater convenience?
- Lower other costs?
Price can be a competitive advantage, but it is not always the lowest price that has the advantage. Certainly, Walmart has built a dominant position in the market as the store with the lowest price point, however, not many businesses can compete successfully as the lowest cost provider. Walmart has a huge budget to build awareness as the low cost leader and the constantly reinforce that message across all media. Unless you can effectively build a dominant position as the low cost leader this may be a dangerous route to take.
Along with price comes a series of subtle messages to the consumer about quality. In some cases being the highest price provider makes a lot more sense. Many niche market businesses have successfully established a position as the premier vendor in the market largely based on price. Of course, pricing is not simple and many factors must be considered.
In many businesses the selling process can be made more convenient and streamlined. Especially in the online world convenience is critical to success. Additionally, speed of the process and the speed of delivery of the product or service is a component to be considered. In today’s digital world consumers have come to expect nearly instant gratification. People want to make purchases and see the results of their purchase immediately. The business that can streamline the purchase and delivery process will always have a competitive advantage.