Today businesses and companies are doing everything they can to be on top. There is intense competition from different kinds of industries. It is very important that business leaders and owners will use and implement the right tools and strategies to gain a competitive advantage– for one common goal: For the business to succeed.
In this article, we discuss “competitive advantage”, and practical strategies and tools to gain competitive advantage.
What is Competitive Advantage?
Competitive Advantage is when a company has an advantage over its competitors by offering consumers better products or services at lower prices than those offered by rivals. It helps a business stand out from its rivals by providing its clients with something that they can’t get elsewhere and that is of higher quality than what the competition provides.
How do you know if a company gains a competitive advantage?
It is when a company is able to beat its rivals in the market and generate more revenue for itself and when the company has resulted in larger margins of profit. It also draws more clients more regularly.
7 Strategies to attain Competitive Advantage
- Use of Differentiated products or services.
To be one step ahead of their competitors, businesses should offer products and services that offer greater value to the customers.
“Establishing meaningful relationships with those customers to ensure loyalty using the products and services, being ahead of the curve when it comes to technology and trends, saving costs on raw materials to remain cost-effective and efficient, leveraging branding and public relations for visibility as well as utilizing analytical tools for timely data-driven decision making,” says Manual Thomas CEO of AquariumLife.
These products and services should be innovated enough to stand out from the competition.
- Invest in efficient and cost-effective solutions.
Developing a new product or service that will lower the company’s cost, yet will not compromise customer satisfaction and offered more value than the products of the competitors.
CEO of Hallmark Timmins, an online gift store Shawn Stack says, “For gaining competitive advantage is to be efficient in all aspects of your operations. This means that you must use the least amount of resources possible to achieve your goals. You should also be able to react quickly to changes in the marketplace so that you can stay competitive.”
How to be effectively cost-efficient?
- Reducing your cost. Reduce your expenses but gain more profits. This is crucial, you need to carefully weigh and decide what expenses you need to cut lower. The less expense cost you spent, the more profit you gain.
- Create value for your product. Make your product become the product that meets the needs of the customers. Nothing beats the idea of having a product that everyone needs.
There will be no guaranteed ways to be cost-efficient, this cannot be achieved in one go. Think of this as a process to be able to understand and know the needs of your company. Businesses should continually evaluate their cost-efficiency.
- Be the price influence the other business in the industry.
This belongs to the price or cost leadership wherein, a company or business has enough influence over other companies that offers the same products or service when it comes to pricing. The leading company becomes the basis of the pricing because other companies will adopt the prices too.
Basically, the main point of price leadership is that companies can use price leadership to gain an advantage by setting prices lower than their competitors, allowing them to attract more customers and generate higher profits, according to Linda Chavez, CEO of Seniors Life Insurance Finder. This means that a company should aim to offer products and services that is way cheaper than the competitors.
However, in using the strategy, always remember that even if the product and/or service’s price is lower, the quality of the product should not be compromised.
- Build Strategic partnerships.
One of the key players in the industry to gain competitive advantage is by establishing strategic partnerships. This a recommended by Matthew King, CEO of perfume line True Pheromones. “Through these partnerships, companies can gain access to new technologies, resources, and customer bases that would otherwise be out of reach. Furthermore, strategic alliances with vendors help ensure a steady supply of materials needed for production. Finally, partnerships can bring valuable experience from other sectors that could prove essential in the development or optimization of key products and services, he says.
- Focus on customer service.
Customers are the very reason why you have a business and why it is running. It is best to provide the customer the best experience when they try to reach out to you about their concern about the product or service. In return this will help you be ahead of the competition.
“Making sure that customers have the best possible experience when dealing with your company is another way to gain a competitive advantage. Take the time to understand consumer needs, listen to customer feedback, and provide quick resolutions to any problems that arise,” says founder of DDIY, Geoff Cudd.
Company provides exceptional service to its customers, making them feel valued and appreciated. This is also a way of forming meaningful, deep customer relationships is another competitive advantage that small businesses may have over large competitors.If you want strong customer relationships to be your competitive advantage, take every opportunity to engage with customers, be transparent, show your appreciation for their business, and personalize their experience. We all like to feel appreciated, and when a business shows their gratitude and invests in excellent customer service, customers are more likely to stay loyal, even if a cheaper alternative comes along.
- Expand into new markets.
Companies can expand into new markets where they may have a competitive advantage. This could include expanding into overseas markets, introducing new products or services to existing markets, or targeting untapped niches. This strategy involves acquiring other companies or merging with them to gain access to new markets, products, or technologies, and to increase market share.
Web Design & Software Development Agency founder, James Nesbitt says, “Engaging with new markets or customers that have specific areas of need and adapting a product or service to meet that need delivers increased stability as the organisation can be seen as the ‘only’ organisation to use for that niche.”
This might be easier said than done but with creativity and perseverance, all of your company’s effort will be much paid off when you know that because of this strategy, you will be at the top of the ladder in your industry.
- Create a strong and positive company culture.
According to Shri Ganeshram, a CEO of Tools and Services for Real Estate Investors, “Creating a strong company culture, means fostering a positive workplace environment that motivates and inspires employees. This leads to increased productivity, higher employee morale, and better job satisfaction.”
Furthermore, when there is increased productivity from employees, there is a 100% chance of producing good products and services, and most importantly, gain positive feedback from customers that will definitely secure a higher spot for you in the industry competition.
5 Tools needed to gain competitive advantage
Finding the right tool according to the company needs and preferences is important. And so, you should carefully decide what tool to use by knowing its benefit to your company.
- Market Research
Conducting market research is important to gain insights from its competitors and the industry. It helps companies understand the target audience and the needs of the market. This information can then be used to create products and services that meet the needs of the market and set a company apart from its competitors.This includes the following:
- Tracking customer preferences. Majority of the customer preferences are subjective which mainly focuses in the things they like and don’t like. When you create a product and planned to market it to customers, you need to consider the customer and.or consumer’s personal preferences.
- Analyzing sales trends. Check previous revenue records and identify the patters that you used in improving the sales performance. This method is effective in detecting the changes in revenue and performance.
- Assessing the competitor’s performance. Identify your strongest competitors and create a profile of each competitor that includes the data like product and services they offer, marketing strategies they uses, and their strength and weaknesses.
Regular market research helps us understand our clients’ wants and preferences, which in turn helps us anticipate their needs and provide cutting-edge solutions. Additionally, we use customer information to evaluate and fine-tune our sales and marketing approaches, zeroing in on the most productive channels and methods for generating leads and completing deals.
- Automation tools
To keep up with the competition, majority of the companies all around the world use of Artificial Intelligence to streamline the processes, reduce the cost, and increase efficiency. This means that investing in technology and automation can optimize the operations and can also gain a competitive advantage.
Concerning this,the CEO Eleanor Fletcher of a publication of consumer’s information company called The Best Brisbane, says, “ A business may need to spend money on automation, technology, and personnel training in order to accomplish process innovation. And this could result to outperform its rivals by offering lower pricing or higher-quality items by decreasing expenses and boosting efficiency.”
Furthermore, the use of automation tools will ensure reliability, availability, performance-increase, higher productivity, customer satisfaction and reduced costs– these are the most important benefits you can get in using artificial intelligence in your business. Nevertheless, do not forget and underestimate the power of good old-fashioned hard work and determination just because you use automation tools.
- Social media Platform
Today, the use of social media is a great way of being competitively advance among the competitors. You can use social media to promote your brand. The same as what Tiffany McGee founder of Nomards says that by using social media and other digital channels to connect with your audience and build your brand, you can increase your visibility and engagement with potential customers.
There multiple ways of using the social media for you business to progress and advance in the competition. One of those are:
- Communicate your brand or business to the customers. Present your brand and company by communicating the message of it to your companies. What is in your brand that customer can’t find to others? Attract customers through the use of social media, for instance, by offering discounts.
- Connect to your customers. No matter what the product is, if you only know how to connect it to your customers needs and wants, the product will be sold out in no time. But how are going to connect to them? By regularly in contact with your customers and develop a deep relationship and engagement that shift the customer to being one of your loyal brand consumer.
- Use social media to resolve customer concerns. Social media is one of the easier platform where customers can send their feedbacks, and question about the products. When they do so, respond and attend to their concern immediately that will make the customer feel valued and another way to gain a loyal customer.
- Customer Relationship Management (CRM) systems
“This one aligns with our company because we want to manage customer relationships. The tool also helps us to improve customer engagement. We track customer interactions using CRM, which keeps us updated about any potential loopholes. Scoro is the CRM software that we use daily.” says Marcus Arcabascio, CEO of Menu Price.
CRM helps companies to track customer interactions and build customer loyalty. Pricing optimization helps companies to set the most competitive prices that customers are willing to pay.
- Analytics tools
To identify customer trends and behaviors, and to develop customer profiles,use analytic tools. Companies can utilize data analytics tools such as predictive analytics, sentiment analysis, and machine learning to gain deeper insights into the market and customers. This can help companies identify new opportunities for growth or areas for improvement.
Finally, customer loyalty programs are used to reward customers for their loyalty and to increase customer loyalty. These tools can help companies stay ahead of the competition and gain a competitive advantage.
On your way to the top!
Competitive advantage is essential for companies to remain competitive and successful in today’s business world. By having a competitive advantage, companies can stand out from the competition, gain market share, increase profits, and drive business growth.
It is much more likely that a firm will be prosperous over the long run if it possesses a competitive advantage. You are able to keep your position in the market by continuing to provide customers with one-of-a-kind goods and services, which acts as a barrier to entry for potential new competitors. In addition, you have the option of investing in research and development in order to stay one step ahead of the competition and adjust to the ever-shifting conditions of the market.
Regardless of what your business is, it is very important that you incorporate one of these strategies and use these tools in your business that were recommended by CEOs of companies all over the world. Take it from successful people, and you will be also be successful . Sure, it will take time but nothing comes immediately without detailed process and careful implementation of the strategies you want to use.
Make your way to the top in your industry using this strategies and tools recommended by successful people.
