How to Find Your Competitive Advantage
If you own a business, have you ever considered why people choose to spend their hard-earned money with you?
The key to answering this question is understanding the concept of competitive advantage.
Competitive advantage is the collection of stuff and things that make any business stand out above their competitors in the marketplace.
This term was first popularized in the 1970s by Michael Porter of Harvard University, who is arguably the Michael Jordan of business strategy research. (MJ > LeBron; Fight me!)
Basically, competitive advantage is all the reasons why someone looking to purchase should give a damn about you and what your business has to offer.
The things that set you apart could be unique products and services, location, facilities, and pricing, to name a few.
Perhaps you sell a product no one else sells.
You may provide a service that is over and above what your competitors provide.
Maybe nobody else sells what you sell in a certain area.
You may own better equipment than your competitors that makes your services more efficient.
There are a million things that you can do as a business owner to set yourself apart from others.
What is YOUR Competitive Advantage?
If you are reading this as a business owner or entrepreneur, I have an exercise for you:
Think about what sets you apart from your competitors.
However, the rule is that you cannot say quality or customer service.
Why? Well, I would argue that great quality and customer service are consumer expectations at any price point*.
This is not to say that quality and service cannot be a part of your competitive advantage.
However, thinking deeper past these two points are the key to realizing all of your company’s potential.
So, with that rule in mind, can you think about what sets you apart from your competitors and what truly is your competitive advantage?
If someone opened up the same business right across the street from yours, why would people still choose to buy from you?
Tough Questions are Necessary
These questions may be difficult to answer, but they are important to consider.
Every business owner wants their hard work to lead to sustained success.
Thus, you must ask yourself tough questions from time to time to ensure that you keep what you have worked so hard to create.
You likely already have a great idea of what makes you better and/or different from your competition.
Competitive Advantage Reflection Exercise
Based off of what you answered in the first exercise, I have another one for you:
Sit down and write out all of the core products and services that your business provides to the marketplace. These are the main, meat and potatoes things that your company does.
For each of these items, write down all the reasons you believe these set you apart from your competitors.
These reasons are the things you likely already execute well in your company.
Ask yourself how you can be better at all of these core strengths. How can you continue to improve upon what you already are good at?
Keep reflecting on these points until you are able to write out plans that you can execute that double down on your strengths.
This will help you to continue to distinguish yourself amongst your competition.
You should now have a clear picture of the path forward to truly being a dominant force in your marketplace!
With no cowboy hat and a unique rock ‘n’ roll attitude, 1990 Travis Tritt sure knew how to get a competitive advantage over the rest of the country music world!
If he can do it, so you can you!
*NOTE: Stay tuned for a future article on the topic of price vs. quality expectations.
