The business environment nowadays is intensely dynamic. In today’s digital age, it is now much easier and cheaper to start a business. To ensure you’re always one step ahead of the competition, having the means to sustain your competitive advantage can make all the difference.
It is difficult to stand out from the crowd in all the competitions and activities. The goal is not to be another fly by night business. However, this can be avoided by creating a durable strategic edge that separates you from rivals.
The vital part of business success is a sustainable competitive advantage over your competitors. It allows a company to focus more, generate more sales, improve profits, and retain customers and employees better than competitors. It is the main driver of long-term corporate value and is what employees value most to choose a company.
Three Main Forms of Sustainable Competitive Advantage Occur at A Very Basic Level
Many small companies have little market share and purchasing power to deal successfully with quantity. However, they are not large enough to compete with larger marketing budgets in their industry. Therefore, small companies need to achieve a sustainable competitive advantage to provide superior value to a particular niche to compete successfully.
There is another benefit sometimes listed, which is a benefit for the first mover. The first-mover benefit is that the current industry’s founder has the edge over those who enter the business later.
- Netflix (Video Streaming)
- Salesforce (CRM Software)
- Uber (Ride Sharing)
While a first mover may offer an initial benefit, it is not sustainable unless one of the three types of benefits outlined above is supported.
This is a good example of Google and Facebook. Neither was the first mover, yet both of these companies now dominate their respective markets.
Five Basic Steps to Build a Sustainable Competitive Benefit
- Comprise the market and its sectors. Look for niches to which competitors aren’t well serviced and can be targeted and sold profitably.
- Develop a sense of what customers want and create a mission statement that takes care of them.
- Work out the important things you need to do well to support and provide the value statement, such as levels of service, quality, branding, and pricing.
- Understand how you will use your talents and core expertise in creative ways to improve your business.
- Design your business model to support and offer value to your customers and employees.
You will have a very clear statement at the end of this process:
- Who are you offering (customers and parts of the market)
- Why they buy from you and not from your rivals (the promise of value)
You will be able to offer the value proposition reliably on the most critical stuff.
Once the competitive advantage has been found, you should use it to benefit the enterprise in many different ways.
Using your sustainable competitive advantage in your sales and marketing makes it easier for clients to understand and give them instead of their competitors why they should split their dollars.
Companies need to think about new business opportunities and maintaining product and service value before cutting costs. When companies cut costs too much, they severe the innovation pipeline and the heart out of business.
If a new opportunity for the business does not support your sustainable competitive advantage, you should wonder whether to follow through on that opportunity.
Is short-term growth more important than building a long-term strength and stability position that can undermine your sustainable competitive advantage?
Your business should have a brand advantage, a style advantage, or quality much more than you do a cheap price. The businesses that win are leading on style and innovation.
Lydia Keith started at Recycle Technologies after the company was purchased in March of 2020. Her organizational skills, ability to learn quickly, and familiarity with government requirements and guidelines will be immeasurably beneficial to Recycle Technologies and its path forward in the changing and growing world of recycling.