Competitive Advantage - 7 Strategies

The competitive advantage is defined as the ability to stay ahead of present or potential competition. This is typically done by evaluating strengths and weaknesses of competitors and seeing where you can fill in the gap or step up and improve. It highlights the benefits a customer receives when they do business with you. It could be your products, service, reputation, or even your location.

Market research will help you to answer these questions. Good market research will reveal how your business is different from your competitors, and what you have to offer that appeals to your customers. In-depth customer research will help you identify your customers' needs and increase your competitive edge.

Here are seven ways companies and individuals can create an edge.

1. Cost Leadership Strategy. Companies may place themselves ahead of the pack by offering attractive pricing.  While this is effective for companies, low pricing is seldom a desirable method for individuals.
2. Differentiation Strategy. Branding is likely the most widely used method to differentiate one company from another.  Individual executives using this method must seek to find a core strength or talent that separates them from the pack. Then they leverage this unique skill or ability through increasing their visibility and the perception of its value to the company.
3. Innovative Strategy. Companies may move ahead of the competition by doing things in new and different ways. People can gain a competitive edge as they discover and offer innovative ways of doing things for the company. If your ideas consistently result in benefits to the company you’ll have that essential edge.
4. Operational Effectiveness Strategy. Some companies just do what they do better than anyone else.  For individuals, this may mean creating systems of operating or new ways to analyze data. When you do what you do very well, you gain a competitive advantage over those doing it the longer and slower way.
5. Technology Based Competitive Strategy.  Companies have sought for a competitive edge using new technology or technology in a new way. Computers and applications continue to… perhaps briefly… give companies an advantage over the competition. Workers who embrace new technology and learn to master it nearly always redefine or increase their competitive advantage over those who resist new methods.
6. Adaptability Competitive Advantage. As markets, economies, and other factors change in this increasingly unstable and unpredictable environment, companies that can adapt have a distinct advantage. Typically this includes smaller or trendy companies.  Executives can bring adaptability to their core strength by being open to change. They can cross train and bring new and more current skills to the table. Perhaps, adaptability is foremost a state of mind.
7. The Information Advantage. Almost all the other strategies benefit from excellent information. The definition of competitive advantage is the skills needed to outpace your rivals. Most of those come through knowledge and information. Successful companies seek the latest in technology, strategies, and data.

When it comes to competition, you must be prepared that on your strategy, they will respond to with their new strategy, tactics and actions. Their purpose will be to begin with reducing your advantage. Because of that, the competition will require constant adaptation of strategies, tactics and activities that you use for ensuring your competitive advantage.