As the development of technology continues, venturing into a business and maintaining a market position has become a significant challenge. With new innovations being introduced every other day, you can’t afford to be complacent. Assessing your current position and seeking ways to advance can help up your game.

In the professional sense, competitive advantage is the experience and potential you possess that make you viable in your industry. In a personal context, it is a distinct quality that makes you noticeable in a crowd. In terms of technology, it can be referred to as the edge brought by the use of advanced tools.

Competitive advantage has been defined in several ways. But it all boils down to a common goal – to stand out.

Competitive Advantage and Its Strategies

Competitive advantage in business is the product of a company’s innovative efforts to distinguish itself in the market. In other words, it is the edge that makes it the preferred choice over other existing brands.

There are three types of strategies to establish competitive advantage – cost leadership, product differentiation and focus.

1) Cost Leadership

This strategy pertains to price advantage. It talks about the Economies of Scale – the more you produce, the lower the cost will be. Producing many would require volumes of the same materials. With wholesale discounts, you can save more by buying more. Lower production costs would mean lower selling prices.

Since affordability is one of the primary considerations of many consumers today, cost leadership gives businesses the upper hand. After all, who can say no to lower prices?

2) Product Differentiation

This strategy aims to differentiate a brand from its competitors. In this case, you point out the perks of choosing your product over the rest.

To apply it, be clear about what you can offer your consumers. Be keen on what they really need and find solutions to what frustrates them in your existing products. Benefits may be in terms of price, quality, availability, or convenience. Researching to identify the equilibrium between the considerations will be worthwhile.

3) Focus

Specifying your target market is an effective strategy. Narrow your focus so that you can best cater to a specific market’s needs and wants. Here, products are more tailored per market segment.

You can start by determining your target customers. From there, choose a product that they habitually use and specialise in it. Let’s say your market is teenage girls with sensitive skin. At their age, they start to be conscious of their looks and might develop an interest in cosmetics. With this idea, it might be good to feature hypoallergenic face powder and lip balm tailored for them.

Identifying your target market makes it easier for you to plan. By doing so, choices can be easily trimmed down, marketing efforts can be made as efficient as possible, and you will be aware of the areas that might need more attention and root out information that may be irrelevant.

Finding a Strategy That Works Best for You

A competitive advantage strategy will help determine the focus of your efforts. The strategy will rely on how you want to be perceived in the market. Do you want to be seen as economically friendly? Do you want to be perceived as a high-end brand that’s expensive but worth the price?

If you want to start up using cost leadership, you may focus less on the variants and strategise on the minimisation of costs.

Let’s say your sales have been consistently growing, and you want to add a twist to keep your current market and appeal to new prospects. This time, you might consider product differentiation and focus. You might launch other product lines and more variants your customers can choose from. Your strategy doesn’t have to be stagnant. You may opt to shift when the right time comes.

Businesses may differ in competitive advantage, but they do have the same target – to stand out and win mindshare. Information is right at your fingertips. Everything you need to start is just around the corner, only if you bother to look.

Keep up to date. Stay ahead of the curve. The goal is to stand out in a continuous span. You only have two options – either dance to the tune or play better music.

To your success,

Mario

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