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How To Really Get The Competitive Advantage Over Your Competition
How To Really Get The Competitive Advantage Over Your Competition
One of the cool things about being an entrepreneur and business author and speaker is that I get to use all kinds of big words and phrases that make me sound much smarter than I am.
For example, just saying the word "entrepreneur" makes me sound quite educated and continental, despite the fact that the only subject in school I failed miserably was French. After an entire school year the only thing I learned to say was, "Mon professeur est un porc de verrue, " which loosely translated means, "My teacher is a wart hog." You can see why I got "la F."
One of the hot catchphrases being bounced around a lot in business these days is "competitive advantage." All the experts tell you that you must get the competitive advantage over your competition before they get the competitive advantage over you. He who gets the competitive advantage wins the game! While that may be true, trying to come up with ways to gain the competitive advantage can drive you positively écrous (look it up, Pierre).
Can we beat them on price? Can we beat them on selection? How about the quality of our goods or the strength of our warranties? Can we one-up them on response time or the number of pepperoni we put on our pizzas or the slices of cheese we slather on our burgers?
Here’s the thing most entrepreneurs don’t seem to realize when it comes to gaining the competitive advantage: you can only gain the competitive advantage in those areas in which you are clearly superior to your opponent. Read that sentence again and let it soak in for a minute, I’ll wait.
You can’t gain the competitive advantage in an area in which you are clearly inferior to your competition, so why waste time trying? Oh sure, you can come up with handy-dandy slogans like "We’re the low price leader" and "Our meats are the freshest in the land."
You can throw money at marketing your witty catchphrase until everyone on the planet has it permanently engrained in their brains (can you hear me now?). But the moment the consumer has to pay more for your goods and your meats taste like day old French bread, all the marketing in the world won’t prove a lie to be the truth. Word of mouth and reality have killed many a great marketing campaign.
So you should only compete in those areas where you have a good chance of actually winning, i.e. gaining the competitive advantage. It’s all about bragging rights; and if you have very little to brag about your customers will come to see you as just another bag of wind in a breezy marketplace.
Many companies compete on price, especially those in the grocery and retail industries. With profit margins as slim as Britney Spears chance of winning mother of the year, trying to go head to head with the big boys on price is a losing game. You can’t compete on price with the Wal-Marts and Coscos of the world, so stop trying.
Again, concentrate your efforts only in those areas where you have a better than even chance of gaining the competitive advantage. How about quality? Is your product superior in quality to all others on the market? If so, concentrate on proving it and branding yourself as the quality leader.
How about customer satisfaction? If your product has documented proof that 98% of customers are happy with their purchase while the industry norm is 75%, make customer satisfaction your competitive advantage mantra.
How about customer service? If your customers love you and keep coming back for more, then concentrate on making that your competitive advantage.
There are other ways to get a leg up on the competition: being first to market with a new product, pioneering a new technology, hiring a key executive to run the show, and yes, coming up with a catchy slogan that everybody knows and you can back up.
Bottomline: if you can’t compete in a specific area, stop trying. You’re fighting an uphill battle you can’t win. It makes no sense to compete in a contest where you know in your heart you can’t win. Concentrate on kicking the competition’s derriere in those areas where you have the superiority to do so. Viva la différence!
Customers buy from you because of a distinct advantage you bring to the table over your competition. It is important that you identify this advantage and build on it to grow your business. What do you do better than...
One of the hot catchphrases being bounced around a lot in business these days is “competitive advantage.”One of the cool things about being an entrepreneur and business author and speaker is that I get to use all ki...
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When Schwab first launched his discount stock brokerage company, he made it a habit to outsource his back office information technology to other companies. At the time, that was the standard practice throughout the ...
