Determining whether a company is positioned in today’s competitive markets will depend on its competitive advantages. Most of the marketing strategies used by businesses are based on these advantages, since they are what will differentiate them from the rest.
It is no secret to anyone that the competition to stand out in the market has become the main headache of companies today.
That is why the capacity for innovation and creativity are skills required by most companies when recruiting new staff.
This has no other explanation than the constant search to offer the target audience something that no other company can offer.
This “something” is known as competitive advantage, and in this article we will explain everything you need to know about it and how you could develop your own. Go ahead!
What is a competitive advantage?
Competitive advantage is a concept established in 1980 by Michael Porter. It refers to a unique and sustainable feature over time not owned by any other company competing in the same market. This unique advantage gives you a favorable position.
It is important to emphasize that one of the bases for the structuring and development of a marketing strategy are competitive advantages.
Characteristics of a competitive advantage
For an advantage to be competitive, it must have certain characteristics, these are:
must be unique
This characteristic is related to the fact that there cannot be another company that has something similar to what your organization offers.
This means that when developing your advantage you must be innovative and creativealways looking for your company to offer something that the competition does not have.
It can’t be easy to imitate
At the time of the development of your advantage you must ensure that it is not imitable in the short term.
Generally, the competition will look for a way to copy your competitive advantage, so if you make it easy for them, it will be copied quickly and it will no longer be an advantage.
It must be sustainable over time
Looking for your advantage to be maintained for a long time will make it really competitive.
That is why when developing it, it is very important that build on a fortress of the company. In this way, it will prevent the competition from imitating or surpassing it in a short time.
3 types of competitive advantages that your company can have
Differentiating yourself from your competitors will be the goal to fulfill when developing your competitive advantage. For this to be easily achieved, it is important that you know the types of competitive advantages that exist, these are:
- competitive advantage due to cost leadership;
- competitive advantage by differentiation;
- competitive advantage by focus.
1. Competitive advantage due to cost leadership
This advantage consists of seeking the greatest possible savings in the production costs of your products or services without reducing their quality.
Obviously, this is going to make what you offer to consumers have lower prices. Something beneficial for your business, since there is a large group of consumers for whom one of the most important aspects when making the purchase decision is the price.
2. Competitive advantage through differentiation
This type of competitive advantage refers to the fact that your product or service is innovative and of high quality. Therefore, it represents value for consumers in a wide sector of the market.
It should be noted that in addition to having an innovative team that is responsible for the development of your products, their production costs will be higher and therefore their price will also be higher.
But since they are unique and of high quality for consumers, the acquisition of your products or services will not be an expense, on the contrary, they will see it as an investment.
3. Competitive advantage by focus
Contrary to differentiation, the strategy of the approach is based on offering a product or service to a specific segment of the market and not to the market in general.
It is very important to make it clear that this type of strategy is based on the same principles of quality and innovation standards as differentiation, only that, instead of covering a general market, it focuses on a specific sector of it.
How to develop competitive advantage in an organization?
To develop a competitive advantage, it is very important to carry out an analysis of the other companies that compete in the same market.
This means that locating the strengths and weaknesses of your competition will make it much easier to develop the product or service that will differentiate you from others.
Remember that you cannot imitate the advantages of your competition. On the contrary, you should seek to innovate new products or services that generate value in your target audience meeting your needs in an optimal way.
It is very important that your competitive advantage is sustainable over time and that it is reference in the mind of your public, since this will make your brand a priority for consumers when they have a need.
Apple as a practical example of competitive advantage
The company that started in the garage of a middle-class family in the United States of America is the perfect reference for the development of competitive advantages.
Apple has established itself as a brand with the highest quality standards in the electronic device market, both in the virtual and physical markets.
Its strategy for the development of its competitive advantages has been differentiation, since it has been at the forefront thanks to its creativity in the designs of its devices and the efficiency with which they work.
Due to this, he has managed to consolidate his brand to unattainable levels. Since, for consumers, having Apple products means more than meeting their needs, it is synonymous with style and exclusivity.
So we can say that there is hardly a brand that competes in the electronic device markets as well positioned as Apple.
We can affirm that the development of a competitive advantage will be the first step to position your organization in today’s markets and must be present in your marketing plan.
Remember that it is important to pay particular attention to your competition, because just like you, it will also be in the process of developing new elements that differentiate it from other organizations.
It is also important to have a creative and innovative team that is constantly developing ideas that can be used to develop that product or service that characterizes you.
If you want to continue learning about how to compete and position yourself in the markets, you cannot stop reading the article: Analysis of the competition. Cheer up and continue learning with us!