What makes a good company great is its ability to use five concepts essential to creating competitive advantage.
A good company is a worthy asset. A great company, on the other hand, is invaluable. One that attracts customers because of a good name attracts suppliers in droves and operates near capacity selling its products and services.
So what makes a company successful?
Businesses need a competitive advantage over their rivals to succeed in a market. If your company does not have anything unique that helps it beat its competitors, it’s just another “good” business.
The choice to implement a competitive advantage is backed by thoughtful strategy and actions to identify and sustain the advantage. Companies that have shown growth year on year have also demonstrated a solid commitment to personnel, safety, ethics and product quality.
Strategies around competitive advantage have evolved in recent years and depend on the following concepts.
1. Technology
The technological revolution is changing the commercial landscape. No longer is technology a mysterious phenomenon. Instead, the goal of every business today should be to transform into a technology-focused enterprise.
The line between technology producers and consumers will blur. Companies that use technology to their advantage will continue to pull away from the competition. IoT and massive data collection will give early adopters a head start that may grow into a competitive advantage.
A great company depends on data. Successful businesses in even the most traditional fields can benefit from collecting, analysing, and putting insights from data into practice.
Successful use of technology requires an integrated management system. Learn how to implement IMS in an organisation to gain a competitive advantage.
2. Innovation
Businesses with an innovative culture are more productive and successful overall. Even a lapse of a few months in planning might cause you to lose a competitive edge in the business world.
It might take a lot of work to push forward innovative ideas while meeting the demands of day-to-day corporate operations. About 54% of innovative firms need help integrating their creative strategy with their overarching business goals.
The first step in designing an innovation strategy is pinpointing and describing the specific objectives to help it achieve and sustain a competitive advantage. We need to move past platitudes like “we must innovate to expand,” “we innovate to create value,” and “we need to innovate to keep ahead of the competition” to get there.
These are not tactics we should employ. They offer little insight into the potential significance of different types of innovation. Instead, a solid innovation strategy must address the following questions:
How will new developments benefit possible buyers?
An innovation, to create value, needs to result in cost savings for consumers or broader social benefits like better health or cleaner water.
There are numerous ways in which new ideas might be beneficial. Product performance, usability, reliability, durability, cost, and so on could all see improvements. Knowing and sticking to the type of value your invention will bring is essential due to the vast differences in the skill sets necessary for each.
How does the business intend to profit from the value it creates through innovation?
In the same way that successful new ideas bring in paying customers, they inspire copycats. The sole possession of the intellectual property is usually insufficient to thwart such competitors.
Think about all the competing tablet computers that came out in the wake of the iPad’s success. When new competitors enter a market, they often raise prices, which can chip away at the profits made by the original innovator.
Maintaining investment in innovation is one of the best methods to maintain ecosystem bargaining strength and deter copycats.
What innovations will produce and capture value for the organisation, and what resources should each receive?
Undoubtedly, technical advancement is a significant source of GDP growth and a critical factor in maintaining a competitive edge. On the other hand, not all groundbreaking discoveries involve cutting-edge technology.
Numerous organisations in the last few decades have successfully figured out how to innovate their business models. Consequently, businesses can choose between technological innovation and business model creation when considering their options for capitalising on prospects for innovation.
3. Ease of Use
Despite being an age-old marketing principle, ease of use has become significant in today’s tech-driven world. It’s helping us get an edge over the competition over time. Easier access to a product strengthens brand equity.
Amazon is ahead of the curve in this area due to the company’s customer-first ethos and dedication to enhancing the buyer’s experience. Consumers are creatures of habit who lack the willpower to put up the mental effort required to ponder anything new or challenging. Amazon knows this, so they develop unique ways to simplify the purchase process.
3. Experience
Expertise is what clients are paying for when you offer professional services. Customers pay for your services because you help them address a challenge.
The level of knowledge offered by a company is the primary determinant of whether or not a client awards the contract. However, despite this knowledge, salespeople often undervalue their knowledge’s impact on a buyer’s final decision.
Still not convinced? Expertise is the most critical component. Professional and social networks are still relevant, but only if the consumer knows the provider’s area of specialty as well.
4. Customisation
An ever-increasing number of consumers are looking for highly customised products, making customisation a market hyper-trend.
These days, customers have more agency and confidence while shopping online. It’s up to them to say what they want, when and when they want to say it. About 91% of customers think they are more likely to purchase from a business if they receive personalized discounts and suggestions. As a result, companies can no longer compete on price or quality alone. Using digital manufacturing to create customised items is one way to set yourself apart from rivals.
Personalisation of products is becoming increasingly popular among consumers. It used to be that the only customisation option was the product’s colour. Modern personalisation techniques use data from 3D scans to create one-of-a-kind products like orthotics and helmets, which are 3D printed using the individual’s exact measurements.
5. Personal Experience
There is a widespread understanding among successful organisations that they must transform into technology firms if they want to remain competitive. It necessitates the strategic application of technology across the board to deliver perfect experiences to internal and external customers.
CEOs are growing aware that their organisations would perform better if they embodied and appreciated design. However, many are unaware that they must immediately integrate technology and innovation to transform into an experience-led organisation if they hope to remain competitive in the market tomorrow.
At every stage along the customer’s journey, an experience company uses technology and design to create an unforgettable event for the customer, the prospect, the employee, and the partner. The end consequence is the accumulation of these experiences and the memories associated with them.
Just a few firms today truly value customers’ time by investing in their experiences. Nonetheless, that is rapidly altering. Beyond a superior product or outstanding service, memorable experiences quickly emerge as the next big thing in business. You can’t build brand loyalty without them.
FocusIMS often works with many clients in the same industries and can see that each has carved out its unique, sustainable niche based on different mixes of competitive advantage strategies.
We can help your business streamline its compliance obligations and keep your business planning, strategy and actions on track.
The key is to be clear on which strategies your business will use to strengthen its competitive advantage.
The next step is to consider what actions you need and when to achieve and maintain a competitive advantage.
