Standing out from the competition is a constant endeavor. Decisions regarding business hours, marketing automation, or ordering and finance all attempt to gain a tactical edge over our competitors.
But what are your strategic competitive advantages? And how can you develop yours? Here, we will look at seven. And although they address best business practices, they can apply to other aspects of your life too.
Become a first-mover.
A first-mover competitive advantage means that you lead the market with a new product, technology, or service. Blue Ocean Strategy states it as seeking “unmet demand in uncontested spaces.” And does not necessarily mean inventing a completely new product.
For instance, Peirce College in Philadelphia addressed declining enrollment by offering online courses and more associate-degree level programs. In other words, it addressed the unmet demand of adult learners seeking skills training. Study your product and the marketplace thoughtfully. Are there unaddressed audiences you could reach with simple tweaks to your product or how it is used?
Niche focus: develop your cost advantage and product differentiation.
Developing your niche—that is, a market with little competition—provides a major competitive advantage. If you are a first-mover, you already have discovered your niche. But you can find other ways to develop your niche. One is gaining a cost advantage. That is, you offer the same or similar product as your competitors but at a lower price. For a startup, that often means keeping overhead lower than your larger competitors. Finding means to reduce production, supply chain, and delivery costs also assist your cost advantage.
Product differentiation also helps you create a niche advantage. How can your product be presented or used differently by the consumer even if it is very similar to competitor offerings? Consider how flaxseed producers broke into the health market by differentiating themselves as high in omega-3 fats.
Compete to hire only the best.
If you are an entrepreneur, you may not have the resources to hire a full staff. You may hire only one person, and that’s if you’re hiring at all. Make sure that hire counts. Be proactive in your recruitment process. Seek online resumes, network on LinkedIn, and find the person who checks all the boxes you need. In the interview, passion about your company and mission are great. But don’t overlook people who simply hold a passion for what they do.
And while it is important, pay isn’t everything. If your budget is too limited to offer competitive salaries, what other perks do you offer? Some potential employees may be excited by an office with a window. Others may prefer the work/life balance of work-from-home days or the autonomy of coming on as an independent contractor. The best hires can afford to be picky, so do what you reasonably can to gain an advantage with a solid staff.
Focus on your strengths.
This may seem like Business 101. Yet even astute business people can find themselves spending more resources on mitigating losses rather than developing strengths. As a personal example, I had a client who offered two night classes with equal marketing budgets. One performed phenomenally while the other garnered no interest. The client reaction was to pour nearly all of the marketing budget into the failed offering rather than grow the successful one.
But this approach isn’t necessarily counterintuitive. A failing product line is a problem. And we want to fix problems! But generally speaking, you will achieve much stronger results by focusing on your strengths.That is, promote and grow your most popular and highest net return goods and services. You are almost certain to gain some competitive advantage if you practice this strategy with discipline.
Never stop innovating and adapting.
We had a sign at our industrial engineering shop. It simply stated, “Never Stop Innovating.” You’ve heard it before. But as our leadership knew, it’s good to be reminded daily.
Innovation and adaptation are a discipline. And those disciplines require practice. Constantly examine your competition. Read trade journals in your industry. But examine other industries too. Even if you run a microbrewery, supply chain innovations employed by a lumber wholesaler might hold a valuable, cost-savings key. Even browsing pop culture trends might create a Eureka! moment and inspire a new branding scheme. In other words, everything you consume becomes related to your company. Work-life balance is important. But over time, you can train yourself to enjoy a dinner out or attend a concert while still making innovative connections.
Build awareness with a community.
Thanks to platforms such as Facebook, LinkedIn, and YouTube, virtually every industry and interest has an online community. Engage them, but first, narrow your focus. As with product differentiation, you want to zoom in on your niche. And if you have a product everyone loves, such as tacos, your niche may simply be engaging the community pages of the town or region you serve.
And don’t overlook building traditional community awareness, too. Booths at city-sponsored street parties, conventions, county fairs, and farmers’ markets can have surprising impact for the right offerings. Likewise, engage with relevant organizations through donations or voluntarism. Or help a student through scholarship or simply taking on an intern from the local college. Each of these items builds competitive advantage by creating positive awareness in your community. Plus, you’ll feel great doing it.
Let business ethics be your guide.
Finally, remember your company mission.Don’t lose sight of the people you want to serve and why. Create a positive company culture and constantly improve your customer service. Poor ethics and lack of honesty are like a rot. They can begin with one unethical decision and metastasize throughout the company. Plus, lack of ethics are publicly observable. Word spreads wider than you may know, and not only in Yelp and Google reviews. It spreads in invisible ways such as word-of-mouth, email, message boards, and Facebook groups. In a way, companies big and small are more transparent than ever in their ethical choices.
But maintaining strong ethical standards isn’t always easy. It can even cost you money in the short term. Yet your choices will become visible. Gain the long term competitive advantage through a sense of purpose and honesty that makes you more than “just another businessperson.” See going the extra mile as an opportunity, and take it every time you can.
Photo by @rohane/Twenty20