Your competitive advantage must be something sustainable, something that would allow you surviving in a longer period of time. It must be recognized as the act, not on the paper in your marketing plan.
Maybe you think that your competitive advantage is because you sell your products and services at a lower price. However, this is not an advantage if it is a temporary solution to attract new customers, because your business can’t continue longer to sell at that price.
However, if you have any innovation in the manufacturing process and appropriate cost management you can have a lower cost than the competition, and therefore, you can sell your products at lower price. That is a competitive advantage for your business.
Strategy, Tactics and Actions
You as an entrepreneur must have a strategy that will enable overcome your competition and at the same time to have tactics that will ensure the execution of it.
In The Quickest Way to Transform Your Small Business Results, we conclude that:
Strategy is a plan of actions for achieving the set of goals that our business has. To implement a strategy it is necessary to have more tactics. For example, if our strategy is to build long-term business relationships with our customers, tactics that we can use for implement it can be providing additional services to regular customers, training, long-term contracts with lower prices, etc. Each tactic has specific activities that must be completed in specific time, and responsible persons for the completion of those activities.
So, you must prepare a strategy for achieving that advantage, tactics that you will use for execution of the strategy and all necessary actions that you must to take.
For example, each business sells some sort of value for its customers. You will have to find out how that value will be better than the competition and how to distribute that value in a better way than your competition. It will be your competitive advantage. For example, your tactics can be:
- value offering at a lower price
- providing faster delivery
- providing better quality
- providing better service …
For each tactic, you must define and delegate activities that must be implemented for those tactics, and through them, you will enable execution of the strategy. For example, if we take faster delivery tactic activities could be:
- analysis of the production process,
- analysis of the supply chain,
- analysis of distribution channels,
- detection of all time that don’t add value,
- elimination of all time that don’t add value…
This is just an example, in the reality the list will be much longer and more comprehensive.
When it comes to building competitive advantage the competition would be your milestone in building such an advantage.
Entrepreneurs must always look at the competition. You must answer the following questions:
- What are the key competitors?
- What is the value that they offer?
- What is their behavior?
- What do they do?
- How do they do, what they do?
- How is accepted their offer by the customers?
- Is there something that lack in their offer?
- Can you add in your offer everything that missing in theirs offers?
- What is the comparison between you and them?
This will help you to discover whether your competitive advantages are strong enough to overcome the competition and provide benefits for your business.
When it comes to competition, you must be prepared that on your strategy, they will respond with their new strategy, tactics and actions to begin with reducing your advantage. Because of that, competition will require constant adaptation of strategies, tactics and activities that you use for ensuring your competitive advantage.
Is your competitive advantage strong enough? You will know when you make the analysis. Do you have a strategy for achieving competitive advantage?