Competitive Advantage

What sets you apart from your competition? Learn how to get a competitive advantage with this course. Learn how to brand, study your competition, identify customers and their preferences, create pricing strategies and much more. Leverage the uniqueness of your business to create a real competitive advantage.

Course Objectives

The course has six key objectives:

  • One, define your brand
  • Two, explain why you should know your competition
  • Three, identify customer preferences
  • Four, explain your personal preferences
  • Five, list strategies for gaining competitive advantage, and
  • Six, identify how you will remain unique

Course Topics

This course will discuss four areas that address why your business needs to have competitive advantage and how to develop a winning strategy to ensure competitive advantage in the market. This course helps in:

  • Identifying the challenges
  • Building a strategy
  • Implementing your strategy, and
  • Remaining unique

Let’s get started!

Background

Keeping your eye on the competition helps you:

  • Price products competitively,
  • Gauge how your competitors are reacting to market forces, so you can adjust accordingly, and
  • Understand where you stand in the online search rankings compared to your competitors

But how do you ensure that your business has a competitive advantage that makes the customers choose your products or services over many other businesses? Let’s find out.

Branding

Before everything, you need a good brand. A great product or first-class service is seldom enough to sustain a lasting impression among your customers. In today’s competitive market, a great branding strategy will help ensure that customers remember your business as the “go-to” source for their needs.

To build a good brand, first, you need to find answers to the following questions:

  • What makes you unique?
  • Will you be consistent?
  • What is your niche?
  • Who are you?
  • How strong will your presence be on social media?
  • What kind of reputation do you want?

Let’s look at each of these in detail.

What Makes You Unique?

You need to identify what defines your business in the minds of consumers and what differentiates it from others providing the same products or services in your target market.

Give customers something to remember. There will undoubtedly always be competition. Show your customers reasons to come back to you.

Will You Be Consistent?

You have to be consistent so that the customer can spot you immediately. Here are a few tips to present a consistent image to your customers.

  • Make sure to convey the same message in all your advertising and marketing.
  • Use professionally designed branding.
  • Use the same visual brand for your logo, color scheme, and style in every interaction with the public so that you look familiar to your customers.

What Is Your Niche?

Creating a niche for your business is essential for success. Often, you can identify a niche based on your own market knowledge, but it can also be helpful to conduct a market survey with potential customers to uncover unfulfilled needs and untapped opportunities. During your research process, identify:

  • The areas in which your competitors are well established
  • The areas your competitors are ignoring, and
  • Potential opportunities for your business

Remember, you cannot make everyone love you, but you can make some people love you. Make sure you target the right customers and provide them with the right solutions.

Who Are You?

Be sure to understand what makes your business unique and what image of your business you want to present to the customers.

It is crucial that first you decide who you are and present that same image to your customers.

While advertising your brand image, consider the following:

  • Be transparent in your dealings
  • Connect with people in every possible way-understand their needs rather than just giving them boring basics, and
  • Be authentic

How Strong Will Your Presence Be on Social Media?

Social media has taken over most conversations in the realm of communications and marketing. The technology provides you an opportunity to connect with your customers more closely than ever before.

People want access to information about your business. Social media is a good way to entice customers through promotions and other marketing methods, engage them, and stay on the forefront of their minds. You can use social media often, but be creative and have something to add to the social media conversation beyond the standard advertisement plug.

What Kind of Reputation Do You Want?

A bad reputation can be a big problem for small businesses. As more people look to the Internet to find reviews, feedback, and information, the need for effective reputation management is becoming a pressing issue for many small businesses.

People will talk about you, but you can help shape what they say. Therefore, make your customers feel valued; never mislead them with false claims or advertisements.

Remember, reputation can make or break a small business.

Memorable Brands

Have you ever thought about why the top brands are so popular and successful? Analyzing the factors that make these brands popular will help you create a successful brand.

Know Your Competition

Knowing your competition is a key aspect of gaining competitive advantage. As a business owner, you want a strategy, product, or experience that is set apart from others. Take the time to examine the following attributes of other businesses up-front:

  • Mission statement
  • Strengths/weaknesses
  • Capabilities
  • Customer base
  • Revenues
  • Profit margins
  • Promotional and marketing strategies
  • Current offerings, and
  • Goals

Where To Research

Where should you research to find out the right information about the market and your competition?

You can assess your competitors based on the:

  • employees
  • trade shows
  • conventions
  • suppliers or distributors
  • stock market analyses
  • government filings
  • demographic or competitive reports
  • newspaper
  • magazines
  • or blogs
  • trade publications
  • Web sites
  • and customers.

You can also visit various shops or the competitor yourself to find out how they are doing business.

Identify Customer Preferences

After figuring out who is your competitor and who is not, as a business owner, you should figure out whom you want to attract as your customers.

Depending on your target audience or your target customers, you need to perform the following tasks:

  • Decide who you want as your target customers-for example, the demographics or psychographics of your target customers
  • Find out your customers’ needs and wants
  • Find out what the target customers care about and what they don’t care about
  • Identify the factors that motivate them
  • Find out how often they make purchases, how much research they do before buying, and what their current buying trends and habits are-for example, do they order online or in a physical store?

Revisit Personal Experiences

Before coming up with a strategy to implement your business, revisit your own experiences. While determining your advantages over other businesses, it is important that you think like a business owner. You also need to put yourself in the customer’s shoes and ask yourself why you like to do business with this establishment, and what it is about the establishment that attracts you.

What Is It About a Business That Attracts You?

Let’s learn more about the factors you need to consider while revisiting your personal experiences. Select each item to learn more.

What Is It About a Business That Turns You Away?

Next, let’s evaluate the factors that turn you away. Is it because you were treated rudely? Were they unhelpful? Was it because their stock was poor or insufficient, and the quality was not up to the mark? Or did you find the prices too high?

Think about a time when you were treated poorly or ignored entirely by customer service. What is it about the business that made you never want to go back? Was it a long wait? Were they unapologetic?

Strategies

At this point, you’ve gained valuable insight to make important decisions. You should now be able to create a strategy. While determining your business strategies, you should follow these guidelines:

  • Make sure you are different. You cannot be everything to everybody. But you can decide on your specific dimensions and establish your unique selling proposition.
  • Be price-sensitive. Pamper your customers with offers such as coupons, sales and discounts, financing packages, a convenient return policy, and a Loyalty program.
  • Make it convenient for the customers to access your business. Choose a location which is accessible, and if possible, offer online ordering and delivery. Be friendly to customers and provide good customer service and accessibility.
  • Be sure to deliver products that are innovative, durable, reliable, and consistent. Your products should be a reputable, recognized brand and trendsetter. Your products can also be companion products.

CASE STUDY: Creating a Strategy

Let’s look at a case study about International Business Machines Corporation, or IBM. IBM is an American technology company headquartered in New York, and is a leading technology company that offers software, hardware, and consulting services. This case study will discuss some aspects of IBM’s strategy which make it a successful company.

In the 1990s, with the increased demand for personal computers, IBM rose to the top of the list of the most successful technology companies. The company had many small businesses and different business channels working separately to make a mark in their separate niches.

In the early 2000s, the market changed considerably as people became more conscious about the money they invested in technology and other products. The benefits the technology or product could bring to the customers became a major factor that determined the sales. With changing market behavior and customer demands, IBM had to adopt a new strategy that could give it a competitive advantage in the market.

Based on an analysis of its customers’ behavior, IBM devised a new strategy which focused on three types of customers:

  • Buyers who have access to technology and who are aiming to buy more
  • Buyers who are technology experts
  • Customers who are responsible for carrying out complex business changes, which includes both experts and non-expert buyers

To serve all three types of customers, IBM introduced seven Routes To Market (RTM). Each of these routes was led by a particular channel at IBM.

IBM also analyzed and compared the expected profit and the cost involved in providing the services. This helped the company to decide on allocating resources or direct teams for clients. This new strategy also resulted in analyzing the abilities of different channels and increasing the focus on consultancy and business solutions, thus providing IBM an edge in the market.

Implementing Strategy

Now that we have learned about how to create a winning business strategy, here are the things you should keep in mind before implementing a strategy:

  • Remember what your primary goal is
  • Remember your audience or target customers
  • Focus on your products and services
  • Brag to the public about the uniqueness and quality of the products and services you are offering, to communicate effectively and justify the price you are charging customers
  • Make realistic and attainable plans
  • Perform an analysis to identify the possible risks
  • Have a backup plan ready so that you are always equipped to face any kind of competition

CASE STUDY: Implementing Strategy.

Let’s look at the case study about Britain’s untraditional Virgin Group and how Richard Branson, the founder and owner of Virgin Group, has implemented strategies that have enabled Virgin Group to be a successful, growing business group.

The Virgin Group includes many companies in different countries with businesses ranging from long-distance carrier planes to outlets that sell CDs, videos, and games; to Virgin Communications, including a small publishing company, a commercial AM radio station, and a television station; to Virgin Interactive Communication, a computer games software publisher, and the Voyager Group, a collection of diverse assets ranging from a hotel chain to a model agency.

Richard Branson’s business strategy involves making the most of publicity. He accomplishes this through a variety of methods, including adventures such as crossing the Atlantic Ocean by speedboat and balloon. Such attempts have created an impression about the organizational culture of Virgin Group.

With the airline industry flooded by intense competition, price survival remains a constant goal. Richard Branson believes in taking a hands-on approach, and therefore he often meets Virgin passengers at airports and asks them how they enjoyed their flights. Any time he goes out to meet passengers, he writes down comments he hears.

Richard Branson also introduced another strategy, which includes having each company in the Group occupy separate offices and enabling employees to take ownership of their particular company. This strategy has fostered a culture that emphasizes individual responsibility, and thus enables drastic changes to be made quickly and easily.

Maintaining Your Uniqueness

Now that we have reviewed how to create a strategy and how to implement it, let’s focus on how you can remain unique.

Remaining unique is as critical as implementing a strategy. You can remain unique by continually evaluating the following trends and updating your strategy according to the changing market trends.

  • Lifestyle trends include trends related to travel, hobby, leisure, work, and home life
  • Technological trends include the new trends in the technology market. For example, Smartphones are becoming more and more popular these days, and business related to them, or customizing your business for Smartphone users, can benefit you
  • Economic trends, such as supply and demand and pricing, can have a considerable impact on your business, if you fail to update your production, pricing, and so on according to the changing economic trends
  • Government trends, such as new rules and regulations, tax laws, and so on, should be carefully reviewed. You should keep up with the news and current events to check on changing trends

Summary

That was a lot of information. This course provided several ways of increasing the value of your business so that customers consistently choose you over your competitors.

In this course, you learned about:

  • Defining your brand
  • Knowing your competition
  • Identifying customer preferences
  • Identifying your personal preferences
  • Strategies for gaining competitive advantage
  • Remaining unique

You now have a better idea of who you are, what your goals are, how to achieve your goals, and how to stay ahead of the competition.

Next Steps

Now what should you do? Follow these steps to begin applying your knowledge of competitive advantage in your business.

  • Step 1 – Brand yourself
  • Step 2 – Do customer research
  • Step 3 – List your strategies and
  • Step 4 – Implement your competitive advantage goals