Competitive Advantage Is the Tool That Will Keep You Ahead If You Use It Correctly!
Do you know what your company does best? Do you know what sets your company above its competitors? Could your company do even better than all the other companies in your chosen industry? Let’s not forget to ask, do you know what your company doesn’t do best, as well?
Answering these simple yet challenging questions prompts a business owner to look intensely at their business to gain insight into its purpose and mission and how well it is achieving this said mission. It is best to answer them with brutal honesty because at the end of the day, cheating the answers is cheating yourself and your business. This is all about competitive advantage.
What Is Competitive Advantage?
Competitive advantage is your company’s set of skills and resources that work to enforce strategies that competing companies cannot enforce as effectively. It is crucial to understand your own company’s competitive advantage because this is the reason that your company is leading in business.
Your competitive advantage is what brings customers to the door to buy your product or use your service. The most successful companies are those that choose to be unique and offer something that stands out in the areas that they excel at. They then focus their energies into these areas to flourish.
Staying Ahead of the Competition
Identifying your competitive advantage is the first step. Next, you have to know that it isn’t enough to have an advantage over competing businesses simply. For your business to be the best, it has to be able to weather the economic storms to stay ahead of the competition. Being able to combat the volatile market as well as unpredictability, is critical.
So, your competitive advantage has to be something you can sustain, something that will endure the passing of time and all the change that comes with it. This is because most advantages of today will be duplicated tomorrow, as a manner of speaking. To put this into perspective, about 70% of today’s new products can be duplicated in a single year. About 60% to 90% of process improvement can also eventually wind up in the laps of competitors. It’s a dog-eat-dog world.
Don’t Be a Fool
If you are banking your company’s success on the incompetence of your competitors, you are treading dangerous ground. It is inadvisable to believe that your business offers a product or service that is better than your competitors today. If that is what gives your company a competitive advantage over them in the future, rethink your strategy. You have to revisit the purpose of your company.
While choosing your competitive advantage, keep revisiting it and working on it, developing it to become better all the time. Having confidence in your product or service is one thing, but being naïve and foolish is another. Depending on the inadequacies of your rival to help you stand out is not a good way of business and will not work for very long, if at all.
Testing Your Company’s Competitive Advantage
You will know that you have identified and developed a sustainable competitive advantage if your customers consistently see a difference between your company and its rival. The difference must be obvious, and it must also influence their purchasing preferences. If the customers are always coming back to your company instead of using a competing company, you need to know why and what is causing this to occur.
This way, you can work on it and always keep it up to standard. The competitive advantage is sustainable if it is difficult to imitate. The competitive advantage must also be something that you can continuously develop and work on. Working on improving it will help you maintain a competitive edge.
The success of your company depends on its competitive advantage and on whether it is a sustainable one or not. By placing your concentration and efforts into your company’s competitive advantage, you can always stay ahead of the competition.
Being one step ahead of the rivals in the industry and keeping it that way is essential. Should you fall behind, it means that your competitors will be getting customers instead. This is why it is essential to give a competitive advantage as much attention as possible.
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