In business, simply having a great idea isn’t enough. It takes a competitive strategy and a lot of work to execute that idea, because you’ll always face competition. The level of competition depends on the industry and niche. Your competitors are the other businesses that are trying to sell to the same customers that you are.
To get ahead and achieve the best results, you’ll need to find a way to consistently deliver a better product or service than your competitors. This is known as a competitive advantage and is key to creating long-lasting success. Creating a competitive advantage isn’t easy, and it’s something that needs to be updated continuously.
In an increasingly competitive and changing world, you need a competitive strategy. The right strategy will help you to better leverage your organisation’s resources while driving innovation and delivering better results. You can find out more about this by studying a corporate strategy course.
What is Competitive Advantage
Competitive advantage refers to the factors that allow a business to outperform other businesses within the same niche. This normally refers to producing goods or services more effectively at a lower cost, which results in better sales and improved profit margins. However, there are many forms of competitive advantage, and each offers its own unique benefits.
Here are some of the main types of competitive advantage and how they work:
- Differential – This involves offering a unique feature or benefit compared to competitors
- Cost leading – Cost leading is to produce the same results as the competition but at a lower price.
- Market-focused – A market-focused competitive advantage focuses on a smaller area of the market, looking at individual demographics and their needs.
- Brand – This competitive advantage focuses on creating a superior brand image through marketing and building brand loyalty.
- Network – Network competitive advantage gives subscription customers benefits and incentives for using the service.
- Resource – A resource competitive advantage is obtained through the limited availability of certain resources used in production.
Benefits of a Competitive Strategy
Establishing a successful competitive advantage requires creating a competitive strategy, and the right strategy can offer many benefits. You can increase market share and brand equity while potentially increasing profitability even during difficult economic times.
Not only that, but it can protect your business from new competitors and disruptors entering the market, helping to stay in front for longer. The best businesses tend to attract the best talent, so a successful competitive strategy can become a continuous cycle of success if set up correctly.
Setting a Successful Competitive Strategy
The key to any successful strategy is research, planning, and execution. With competitive strategy, it’s no different, and organisations need to ensure they follow the steps carefully if they want to be successful. The research phase is the most important and involves building your understanding of the market and your competitors. You need to know what your competitors offer and their position in the market, especially in relation to your own business.
After this, you should also set goals on what you hope to achieve from your strategy. It’s important to set SMART goals that are specific, measurable, attainable, relevant, and time-bound. This will help to focus your efforts and ensure that you can build in the right direction and measure success.
From here, it’s simply a case of working towards the competitive advantage that makes the most sense for your business and its position in the market. For some businesses, this might mean reducing costs, while others may look to narrow their target market and offer a more specific service.
Grit Daily News is the premier startup news hub. It is the top news source on Millennial and Gen Z startups — from fashion, tech, influencers, entrepreneurship, and funding. Based in New York, our team is global and brings with it over 400 years of combined reporting experience.