What is a competitive advantage?
Definition of Competitive advantage
Competitive advantage, often referred to as Exclusive or Unique competitive advantage refers to attributes that allow a business to offer its clients greater value than its competitors. Your business’s UVP should not be easily copied or bought by competitors.
Example:
Some examples of the attribute of greater value can range from producing products at a lower price, providing greater benefits for the service and providing a faster service time.
Your competitive advantage is what justifies paying the price for your services and ensures that your business can outperform competitors by attracting more clients.
What can be your competitive advantage?
Insider knowledge refers to the market knowledge that a business owner (or founder) has gained from working in the industry relative to where the business intends to operate. By virtue of working in the industry, the business owner (or founder) already understands the problems and viable solutions better than their competitors. Having worked in a strategic position provides the experience that may be lacking with competitors. Access to lists refers to the access of suppliers, clients, or businesses. These lists are generally acquired over time and are not accessible to everyone, thus rendering this a competitive advantage. Existing alliances refer to existing strategic alliances with key players acquired via long-term friendships, relations, existing network systems, or even family connections.
These alliances offer much-needed early traction in the specific market, and due to its unavailability to others, this becomes a competitive advantage.
Ethnicity refers to language and cultural understanding, as well as having extended family, friends, or any experience in the supply chain of the specific industry that your business is trading in. This gives you a competitive advantage over your competitors who do not share the same ethnicity or understanding. A gift refers to the talent that the business owner (or founder) is born with or builds their business on. A key requirement for obtaining a greater competitive advantage, the gift may be intellectual (through problem-solving), creative (as outside-the-box thinking), perception (through insight), social (through empathy), or physical (through endurance). Other competitive advantages may come from other sources, such as the ability to attract and create a dream team, the ability to get exclusive access to distribution channels as per previously established relationships and networks, or the ability to secure endorsements.
Examples of other competitive advantage resources:
Physical, Intellectual/technological, Human and Reputation
Physical
Equipment,
Location,
Infrastructure.
Intellectual/technological
Patents,
Trademarks and trade secrets,
Brands,
Software.
Human
Skills and expertise,
Knowledge and linguistics,
Attitude,
Advisers.
Reputation
Of the product or service,
Of the people with influence, and
Of the organization.
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