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Competitive Advantage
Well what is competitive advantage? It is basically a commercial advantage that one company or organisation has over its competitors. In respect of strategy the ultimate objective is to ensure that this advantage is sustained on an ongoing basis and that competitors are always one step behind. Warren Buffet has mentioned in an article featured in Fortune magazine “:"The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage. Knowledge is the ultimate competitive advantage only if understood from an action-oriented perspective”. The guru of competitive advantage is the well known Harvard University Professor Michael Porter.
A Real Advantage
Effective competitive advantage is to offer (successfully) a service or product before your competitors or if you are an entrant where a competitive product already exists then you need to offer a differentiated service or product in order to gain the top spot in the market segment that is being participated within. The role of marketing department is to find niche’s where distinct advantage can be publicised and exploited above that of the direct competition. I would suggest that any company entering into a new market or one that has a strong competitive base already established, that they seriously brain storm their “go to market” techniques related to the market space that they are looking to dominate. Techniques such as SWOT (strengths, weaknesses, opportunities and threats) and PEST (political, environmental, sociological and technological) should be employed in this analysis phase.
Business Intelligence Equals “Information”
Competitive advantage is all about knowing about your competitors and their offerings that is why business intelligence and market research is vitally important. Competitive advantage is like a chess game with strategic moves giving the upper hand in the market place.
Strategy
Make sure that your organisation is using everything in its power to gain an advantage and that includes employees and other resources. Look at business tools to gain a complete advantage (see business analytics). It may be costly but the investment may reap rewards. Ensure you can sustain anything that you may introduce, to move forward with a strategy that is under resourced can seriously damage your businesses health especially when it affects customers, this then affects your reputation.
Control Your Costs
Competitive advantage means that you need to ensure that your service or product is produced at the lowest possible cost, thus your cost base means that you can afford to be price competitive over your rivals whilst maintaining quality and service. Leave no stone unturned, look at everything.!!
Conclusion
You are looking to seek a competitive advantage in a specific market space. Ensure you do your homework and look at every aspect of the market in order to find those niche’s where you have an advantage over your rivals. It could be the ability to produce an item that much cheaper, it could be that you can make it faster (look at how quickly Dell can make a computer from component to finished product) whatever it is, identify it, market it , exploit it and ensure you can continue to improve on it. Remember the competitor is the one always running with you to the finishing line. Make sure you win!!
Nigel Penhearow is professionally qualified sales and operations expert with in-depth knowledge of many business practices. Many of his articles are based on actual experience of putting theory into practice. You can find out more about Nigel by visiting his web site www.operations-director.com or you can link with him at LinkedIn by using the following link http://uk.linkedin.com/in/penhearow .
Competitive Advantage