Competitive Advantage – The one thing successful businesses have in common

Building a successful business is not easy. According to the Small Business Administration (SBA) about 50% of businesses fail during the first year in business. The U.S. Census Bureau reports that 400,000 new businesses are started every year in the USA. However, 470,000 are dying. While these statistics are troubling, they are meant to create awareness, not to deter the pursuit of business ownership.

If you are serious about starting or growing a business, you need to focus on the one thing all successful businesses have in common, a strong?Competitive Advantage! An edge over their competitors?that attracts buyers to their brand.

What is Competitive Advantage?

A competitive advantage is a brand's "Why Factor".?It answers a critical question "Why would people buy your brand instead of a competitor?"

A competitive advantage is anything that your business does better than a competitor, or that a competitor does not or cannot do. A competitive advantage can be highly advanced, like proprietary technology. However, it can also be something simple, such as impeccable customer service.

Your competitive advantage should be strategically developed within your business plan or annual marketing plan. A powerful competitive advantage is not easily duplicated.

How to Develop a Competitive Advantage

It is very rare that a brand can continue to grow by relying solely on its initial competitive advantage. Savvy business leaders are constantly looking to develop new advantages to keep them ahead of the curve. That is one reason successful businesses conduct annual planning and develop new strategic marketing plans.

It is critical to understand that

1. Your approach to developing and keeping a Competitive Advantage must be dynamic, markets change quickly, competitors adapt.

2. Develop a strong competitive advantage by diversifying with multiple factors that provide an advantage.

3. Align competitive advantages with target markets, a product may have a set of benefits that appeal to one market, while also providing additional benefits that add value in a different market. Do not promote all advantages to every market, rather focus awareness on advantages applicable to the target market.

4. Develop a marketing plan that strategically develops and makes the most of your competitive advantage.

Powerful competitive advantages have one or a combination of the following factors:

·??????Patented

·??????New or proprietary technology

·??????Disruptive innovation

·??????Access to natural resources

·??????Being first to market

·??????Strong brand awareness and perceived value

How to Keep Your Competitive Advantage

History is full of examples that prove a competitive advantage can be lost. Yahoo was a very popular search engine during the beginning stages of public internet access. Yahoo’s competitive advantage was its massive hub of content available to its users. The company’s website was human curated and fitted to attract audiences. Yahoo then utilized website crawlers (spiders) to create an index of different websites.

Then another brand with an odd name began to gain popularity, Google. They developed an algorithm that seemed to do a better job of crawling websites and extracting data that was a better fit for what users were searching for. In other words, Google seized Yahoo’s competitive advantage.?

What this means for your business is that you must constantly monitor markets and competitors. As well as set new goals annually and develop strategic marketing plans to achieve those goals.

Do not make the same mistakes

It is very possible that the leadership at Yahoo developed “confirmation bias”. A strong preference for research that supports the opinions of leadership and minimizes or ignores any other data. This is a very common problem in small and mid-market businesses.

We can help by providing a new perspective with an unbiased view. One that is based on deep insight from extensive research, experience with different industries, and strong business acumen coupled with awareness of the external factors (PEST – Politics, Economics, Social, Technology). An Astute Fractional CMO will develop strategies to improve or develop competitive advantages and keep you ahead of the curve.

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