Finding Your Competitive Advantage
The rental car company Avis once ran a series of ads proclaiming, “We try harder.” Faced with the marketing juggernaut that is Hertz, Avis capitalized upon its position as the second-place company in the business by saying it tried harder because it was number two. When it comes to commerce, why should anyone buy from you if you do everything just like your competitors? Finding your competitive advantage is key to differentiating yourself—and as the Avis example proves—mounting an effective marketing campaign.
These areas are where you’re likely to find yours.
When you have a price advantage over your competition you can exploit without resorting to a price war, you’re in a very good position. Maybe you produce the item yourself and can sell it for less, or maybe you have a sweetheart deal with a manufacturer. Whatever it is, you have strong advantage if you can be profitable selling for substantially less than your rivals. However, you should only do this if you can still make a healthy profit. Don’t undercut competitors to gain market share at the expense of profit. Nobody wins a race to the bottom.
Perhaps, you’re positioned to perform better than anyone else operating in your sphere. Take FedEx for example; nobody else was offering overnight deliveries of parcels when the company started. That was a significant competitive advantage. Federal Express prospered as result and still stands out, even though a number of other players have moved into that space.
When Apple introduced the iPhone, it didn’t really invent anything new. It simply combined a lot of tried-and-true items in one package. Before the iPhone, you had to carry a personal portable audio player, a cell phone, a camera, maps and a personal computer. The iPhone combined all of those functionalities into a single package and gave Apple a huge competitive advantage.
Markets can shift overnight. Companies best positioned to adapt to paradigm changes will do well while the competition struggles to adjust accordingly. Whether you’re considering how to sell ebooks online, furniture, cosmetics or electronics, having a prescient team of executives at the helm keeping their eyes on trends is key to setting your organization up to capitalize on new situations when they ripen.
Every cola you’ve ever seen is brown in color and comprised primarily of sugar and water. Yet, Coke is the leader in the segment because of the efforts made to differentiate the product over the years. Yes, Pepsi has done so too, but it doesn’t have nearly the cachet with the general public as Coke does. In fact, a lot of people refer to any brown carbonated sugary beverage as a “Coke,” even when it isn’t Coca-Cola.
Henry Ford didn’t invent the car. He just came up with a way to build them faster and more cheaply than his competition. This technological advancement led to his company dominating the auto industry for decades. Further, much of Ford’s assembly line expertise is still employed to this day. The Model T wasn’t necessarily a great car, but it could be had quickly and at a great price because of the technology Ford brought to bear to build it.
Finding your competitive advantage will require a degree of introspection on your part. It will also require you to take a good look at your competition to see what you’re capable of doing for customers it can’t. When all is said and done, what you’re really looking for is a singularly profound answer to the foremost question in the mind of every consumer.
“What do you have that I believe I can’t get anywhere else?”