What makes Starbucks superior to the café close to your house is what we will be discussing today. I watched a documentary about Walmart that store owners were complaining about the fact that they tend not to have any customer in their shops once there is a Walmart outlet/store in their environment (this is based on documentary, there is no Walmart in my region so I can’t say but the fact that when a bigger brand comes to a location where smaller brands are, they tend to overshadow them). This happens because of something called Competitive Advantage
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If I ask you to get me a very good coffee to drink, I am sure you go to Starbucks not minding if there is a small café beside it. Competitive Advantage is what a service, product or goods superior to others in the sight of a customer. I even notice that competitive advantage works in organizations, products and countries. It is possible to always buy a company product but dislike another product from the same company, you will prefer to buy goods or business from one country to another and this is the effect of competitive advantage since they get greater value either through lower prices or greater services to support higher price.
What can give your product a competitive value to other product and you can do this is what I will be sharing with you today.
Give What Customers Need
A lot of people create business with the aim of making profit only, actually this is good since the aim of all business is to make profit but one thing you need to understand is that before starting a business, you need to consider your customers first, which means customers first before product. If you decide to produce a luxury good in a slum region because you have $10 Billion to throw away, then you will eventually lose your money because people living in slums do not have enough money to live in a very good place, people live from hand to mouth which means your product isn’t meant for them.
What is the real benefit of your product, is it a need to your customers or a waste? If you sell a product to people who need it, then you will become a favorite. Also, while delivering what your customers want, you must remember to stay in trend with things that will make your business grow. If you stay in one position in your business, other businesses will overtake you.
Know Your Competitors and Give the Killer move
“If you want to hit a person, hit them hard that a revenge on you won’t bother you” This is one saying that is good for competitive advantage. What do you say to a $50 million company producing coffee for a particular set of people only to have a $5 billion company producing the same taste of coffee with a better costumer experience such as customer service, low price, raffles and souvenirs when it lunches? That is knowing your competitor.
What can be Your Competitive Advantage as a Business?
Just because a company is the market leader now, doesn’t mean it will be forever – Michael Porter.
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Reduced Price
A lot of businesses always do this, especially supermarkets and grocery stores. The ability to provide a particular service or sell a particular product at a lower price but at quality value.
Although most of this businesses often find a way to cover for the low price either by paying low wages or sometimes invading taxes but the low price is often a threat to their competitors and that stands as their competitive advantage. Countries also use this as a competitive advantage, China is a very good example. Chine produce goods at a cheap price at a reasonable quality and that Is their competitive advantage.
Service Differentiation
This is often associated with services rather than price. The ability for a company to deliver products fast, have a quick customer service, high value for customer’s comfort even when the price of the product is high, or when the service is expensive. The ability to always make customers happy and comfortable is the competitive advantage.
The only way to get your customers and client to keep coming is to find your competitive advantage and use it well.
Do you know of any company that uses competitive advantage?
What keeps you going back to one business place to do business?
What keeps you keen to a particular product?
I will appreciate if you share your views in the comment. Thanks for taking time to read my blog
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