The ultimate guide for the competitive advantage

Companies that have a competitive advantage over their competitors. For the benefit of the company’s shareholders and its ability to outperform its competitors, this results in more profits for the organization.

It is essential to have a competitive advantage that is difficult, if not impossible, to replicate. It is not considered a competitive advantage if it is easily replicated or imitated.

Examples of competitive advantage include:

  • Access to limited natural resources from competitors
  • Highly trained labor
  • Unique geographic location
  • Access to innovative or proprietary technologies
  • Ability to produce items at the lowest cost

Building a competitive advantage

Before creating a competitive advantage, it is important to know:

Benefit: The Company must be clear about the benefits (benefits) that its product or service provides. It must provide real value and generate interest.

Target market: The Company must determine who is buying from the company and how it can meet the needs of the target market.

Competitors: It is important for the company to understand other competitors in the competitive landscape.

To build a competitive advantage, a company must be able to tailor the benefits it offers to its target market in ways that other competitors cannot.

Strategies Competitive advantage

There are three strategies for creating a competitive advantage: cost leadership, differentiation, and focus (focus on cost and focus on differentiation).

Cost leadership

In a cost leadership strategy, the goal is to become the least expensive product. This is achieved through large-scale production, where companies can exploit economies of scale.

If the firm is able to take advantage of economies of scale and produce products at a lower cost than that of its competitors, the firm is then able to set a selling price that cannot be replicated by other firms. Therefore, a company that adopts a cost leadership strategy will be able to reap the profits due to its significant cost advantage over its competitors.


Differentiation strategy, a company’s products or services are differentiated from those of its competitors. This can be done by offering high quality products or services to customers or by creating products or services.

If the company is able to differentiate successfully, then the company will be able to set a higher price for its products or services.


In focus strategy, the company focuses on a narrow target market segment. This strategy succeeds if the company is able to successfully create products/services that can meet the needs of these customers. Focus strategy has two variants;

Cost focus: the least expensive product in a narrow market segment

Focus on differentiation: differentiated products/services in a narrow market segment

Examples of competitive advantage in the market

Three great examples include:

  • McDonald’s: McDonald’s main competitive advantage is based on a cost leadership strategy. The company is able to take advantage of economies of scale and produce products at low cost and, as a result, offers products at a lower selling price than those of its competitors.
  • Louis Vuitton The Louis Vuitton feature is based on differentiation strategy and focus on differentiation. The company is able to be a leader in the luxury market and controls premium prices through the uniqueness of the product.
  • Wal-Mart: Wal-Mart’s advantage is based on a cost leadership strategy. Wal-Mart is able to offer “everyday low prices” through economies of scale.


Importance Competitive advantage

Competitive advantage distinguishes the company from its competitors. It contributes to higher prices, increased customers and brand loyalty. Creating such a feature is one of the most important goals of any company.

In today’s world, it is essential to business success. Without it, companies will find it difficult to survive.

How do you define and communicate your competitive advantages to potential investors as a startup?

Knowing your competitive advantages as an established and entrepreneurial team is key to securing funding as a startup. Some entrepreneurs have a very clear view of their unique advantages. Others need more clarity, or are still struggling to polish it for presentations and prepare to shine at investor meetings.

Here’s how to get more clarity on your interest, identify an advantage that makes sense for investors, and tips for conveying it in a way that clicks.

The Role of Your Competitive Advantage

For startups, competitive advantage isn’t just something you should be able to quote if investors ask for it, or be able to bring it up in a presentation. It is also likely to be a major part of your elevator pitch, and your logos, and usually form the basis of your business model, are the core of your strategy, messaging, and marketing.

In this regard, founders looking to raise capital need to clearly define and explain in their presentations, what sets their business apart from others? This is essentially the advantage that will allow you to execute better and faster than others operating in the same space. In such a competitive market today, if you don’t have one obvious advantage, you probably don’t have a viable business. Or, as Jack Welch says, “If you don’t have a competitive advantage, don’t compete.”

Types of Competitive Advantage

You don’t need to excel in every area and on every front. In fact, trying to does this more often will not only mean that you fail to excel in any field, but will result in a poor playing field and difficulty in fundraising for startups.

You don’t have to be the best at everything all the time and on all fronts. However, in reality, trying to do so may result in poor presentation and trouble getting funds for businesses.

  • Diversity
  • Need-Based
  • Access

These are all forms of GPS.

The three general value controls in which your advantage may fall are as follows:

Operational Excellence

Customer Intimacy

Product Leadership

Areas of Modern Competitive Advantage

What would be an effective market advantage have evolved somewhat over time. Today, some of the common ways entrepreneurs like to describe their advantages include:

  • Speed ​​of delivery
  • Speed ​​of market access
  • Price
  • Technology
  • Design
  • Scale
  • Customer service
  • Personalization
  • Intellectual property and branding
  • Experience

Competitive advantages Sustainable versus unsustainable


Many of the types of benefits listed above may not be sustainable. This can make them less desirable or valuable to investors.

Warren Buffett has always been vigilant about this difference, and what he describes as businesses surrounded by “trenches.”

The Funders Club says that while first-mover advantage, deep knowledge and product differentiation can be used to create a sustainable advantage, it is not enough to occupy a dominant market position themselves. Alternatively, strong brand statements and registered trade secrets may be much stronger and more sustainable. In contrast, sustainable advantages provide less risk to investors.

Define one thing of your own

competitive advantageFor those entrepreneurs and founding teams who are still not sure if they let it go, there are several ways to refine and test if they got it right.

Conducting surveys of potential clients in your industry is a good start. What do they want? What are they not getting from existing service providers? What is it worth to switch brands?

Neil Patel recommends setting up a launch page and trying to build a list with email subscriptions. If you don’t pay enough attention to people to put in an email address, you may not have the huge advantage of differentiation you thought.

If this strategy goes well, why not launch a pre-sale? There can be a big difference between those who say they like your ideas and those who are willing to pay for it. If no one pays, you may not have a business.

Given how much it can be compatible with this single factor, it’s also likely to be worth reaching out to an outside consultant who has broader and deeper experience and who may see advantages you didn’t think were great from the deal.

Weave your advantage in stadium your

Tom Searcy, founder of Big Hunt Sales, goes further in recommending defining your competitive advantage in terms of a customer-focused statement. This means identifying the perfect home run client. A customer who absolutely cannot say no to your product or service if they hear about you. Then describe how to completely solve their big problem, then advertise your market or niche.

So, how do you stand out? What unique feature do you have, that no one will touch, that will keep you ahead, and that is worth putting a million dollars into?

Tips for Gaining a Competitive Advantage

In today’s highly competitive market, every company strives to gain an edge over the competition. It’s also getting more and more difficult, thanks to the buyer getting smarter. Studies show that buyers make more online. In fact, 86% of buyers are more likely to check your competition now

What can companies do to gain and retain a competitive advantage? Here are some strategies that will differentiate your business as well as retain your customers throughout the entire purchasing lifecycle

. Create corporate culture attracts best talent

That fined the best people not only important for productivity and reduces costs. It’s also important that having happy employees means that your customers have better experiences. Customers know the difference between buying from a company where workers are not happy. They know that when workers are supported, the quality of care is better and products have fewer problems. Customers want to buy from companies that take care of their people because that means they take care of their customers. This gives you a competitive advantage.

Identify ports that are undeserved

In fishing there are two types of fish. Those you find in oceans and those you find in lakes or rivers. For obvious reasons, fish that grow in the oceans are larger, but they require much more effort to catch. Fish that grow in lakes and rivers are easy to catch but tend to be smaller compared to parts of the ocean. It’s the same with clients. When you’re looking to gain a competitive advantage, it can be easy to look for well-known niches that are easy to find customers. However, looking for areas where customers are not getting enough services can give you a market advantage. There are often few competitors, plus you can take advantage of the market to establish brand recognition early on.

Understand your ideal customer’s DNA

Customers are not all the same. In fact, just because someone wants to buy from you doesn’t make them the best customer. The right customer targeting, awareness of the buying process, participants in decision making, information needed and at what time, etc. can help the sales team (and after sales support teams) to win business and retain lifelong customers. When customers feel that you understand them, truly align with their needs, and serve them exactly what they need when they need it, they will position you far above the competition.

Point out your strengths Your

Business, like any other activity, has core strengths and competencies. These may be processes, technology, or knowledge/experience/experience. Whatever it is, it offers value to your customers and is what customers buy from you. Consider how you can use these strengths in creative and innovative ways to gain new business, tap into new markets, etc. Additionally, how can you use your core competencies to create value for your customers? These are the main factors that must be explored to create a clear market advantage.

Create your own unique value proposition

Many companies often use common value propositions such as pricing, service levels, quality, brand recognition, etc. to create a competitive advantage. While this can and is often a great start, keep asking the “so what” question until you get a statement that is much more unique, special, and competitive than the statement of others in the market. For example, if everyone in your market is talking about quality customer service, ask yourself “so what” about your customer service. In other words, what makes your service and support better? How is it more valuable? What do you offer that your competitors do not? Don’t stop until you can come up with a single statement like, “Our 24/7/365 Customer Service provides you with guaranteed on-site care within 2 hours, or we replace the product for free within 24 hours.”

Reward Behaviors That Support Company Mission and Value

Whether you seek to reward the best performers in your organization, or to honor customers who have been your best buyers, reward behavior has many benefits. First and foremost, rewards such as travel incentives provide opportunities to combine leisure with work and build relationships outside of the office environment. In fact, among the top-performing companies, 90% use bonuses

even when faced with stiff competition, having a competitive advantage offers you greater chances of closing more business. Most importantly, the stronger your competitive advantage is, the greater your ability to maintain a position of strength in the market regardless of its conditions or level of competition.



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