Competitive Advantage:
Setting your Business Apart
Competitive Analysis
Studying the competition helps you choose the most viable and innovative tactics and best practices to create and maintain a competitive advantage with a strong potential for profit. If you’re not better than your competitors in some way, there’s no reason for consumers to choose you.
To help you create one or more of the following: better product/service; better price; better support; better experience; better value; better location; better messaging
Competitive Advantage
A business’s competitive advantage is the value and the strengths a company brings to its customers. This is a company’s strengths and what sets it apart from its competitors.
There are four kind of competitive advantages:
Comparative advantages
Differential advantages
Strong customer service
Strong branding
Comparative advantage
A company’s ability to produce their products or services more efficiently than their competition. This leads to higher profit margins. Why? Because their processes are consistent and prove to work.
If a company produces at a slower rate and is more expensive due to a small staff. Generally speaking, customers are more likely to choose their competitor.
Differential advantage
A differential advantage is when a business's products or services differ from its competitors' offerings and are seen as superior.
Advanced technology, patent-protected products or processes, superior personnel, and strong brand identity all lead to strong differential advantage. A patent is a right, granted by the United States to an inventor, to exclude others from making, using, selling or importing an invention throughout the United States without the inventor's consent. The inventor may license or sell the rights defined by the claims of the patent. (Patent Definition)
Customer Service
Before your customers become your biggest fan, you need to be theirs. The people who support your business are the ones that are pushing your business forward. These are the people who are making your business become a reality.
Branding
A brand and brand experience is something that customer experience but is very hard to define or measure value/results from. Many things go into what a brand is but a few examples are:
Your customer experience and how your business makes them feel is all part of your brand.
Colors, logo, and the aesthetic
Pricing
Applying Competitive Advantage to your SBE
Define your comparative advantage. Outline how you can improve your efficiency. If your business is more efficient than your competitors, explain why and how.
Define your differential advantage. How is your product or service better than your competitors? How is your brand identity stronger?
Define your customer service processes. Outline what your team can do better to improve the customer experience. Outline what your team is doing better than your competitors for your customer experience.
Define your brand identity. Outline the overall look and feel of your business. Create a brand identity that stands out from your competitors.