Saturday, 17 March 2018

Business Competitive Advantage

chess, winner, winner, chess pieces, competition
Businesses exist in a competitive environment. Statistics tell us that a failure by business owners to properly identify their competition and take appropriate steps to differentiate their business is a contributing factor to business failure.

What is a Competitive Advantage ?

A competitive advantage exists when your business is able to provide the same or similar products and/or services as your competitors but at a lower cost and/or differentiated in some way such that superior value is created for your customer, and in turn you generate greater profits.

By its nature, obtaining a competitive advantage will form part of your strategic business planning process, which will entail assessing:
  • Your target market; and 
  • Exactly who your competitors are within that market. 
The target market essentially being the group of customers or clients that you have determined has the characteristic needs which your products or services can satisfy and upon which you will focus your marketing efforts.

How to Achieve a Competitive Advantage ?

Businesses can achieve a competitive advantage through a number of strategies (both price and non price). These will vary depending on the type of business and industry sector, but may include:
  • Promoting their particular know-how and skill 
  • Having unique intellectual property interests, eg. patents and trade marks 
  • Maintaining low cost structures 
  • Achieving superior brand awareness and reputation 
  • Meeting quality standards, such as through Australian Standards:
  • Effectively using information technology 
  • Having an accessible and visible business location 
  • Providing a unique product and/or service 
  • Competitive price 
  • Effective marketing/promotion strategies 
  • Correctly identifying a market segment – that is, a particular niche market that is not being fully or properly serviced by competitors 
  • Obtaining a better understanding of what customers/clients want and offering them a product or service that meets their needs 
  • Understanding your core strengths and abilities and building your business around this core 
Once you have identified your competitive advantage you can use this as an additional selling point in your marketing and advertising.

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The material provided in this document is for general information only and is not to be relied upon as advice. No responsibility is accepted for any loss, damage or injury, financial or otherwise, suffered by any person or organisation acting or relying on this information or anything omitted from it.

Copyright © Greyson Legal 2018, All rights reserved.

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