What is a competitive edge?
Competitive edge refers to special qualities, tools, resources and benefits your company brings to the marketplace. Your competitive edge is what brings your customers to you rather than to another business. Companies refer to competitive edge by saying competitive advantage and value proposition.
Knowing what your business’s competitive edge is can help you harness its potential and highlight the unique value you offer to customers. Businesses often build their success through a deep understanding of what they do better than their competitors.
Related:How to Grow Your Business
Examples of competitive edge
Competitive edge can come in many forms. Some types of competitive advantage come to the company naturally, while companies carefully hone and develop other types of competitive edge. Review these value proposition examples to see what advantages your company may already offer:
- Resources:Some companies have ready access to resources their competitors can’t access.
- Labor:Excellent employees with top-notch skills can add enormous value to a company’s competitive edge.
- Location:The physical location of the business can offer a competitive advantage if it’s highly convenient for customers to visit.
- Proprietary technology:If the company has proprietary technology that their competitors do not have access to, they may be able to produce a higher quality product or substantially decrease production time, leading to a boost in value.
- Manufacturing:Companies with outstanding manufacturing facilities or practices can make a superior product to their competitors.
- Brand awareness:Those companies with superior brand awareness have a larger potential customer pool to draw from than companies with little to no brand recognition.
How to gain a competitive edge
If you want to increase the competitive edge of your company, follow these steps:
1. Perform a competitive analysis
Begin by performing a competitive analysis. This type of analysis involves closely examining your competitor’s business practices and strategies to see what you might do to set your own company apart. Usually, a competitive analysis involves:
- Identifying effective strategies such as marketing protocols, manufacturing choices or brand recognition.
- Discovering missteps the other companies have made in the past that led to a decrease in productivity or profit.
- Observing trends the companies are currently using to maximize their success.
- Learning what organizations and other businesses the competitors regularly interact with.
- Understanding their past and present marketing strategies for efficacy.
You can use this information to determine what strategies will or won’t build a competitive edge for your company.
2. Examine your value
After performing the competitive analysis, see what value your company offers that your competitors don’t. Use the information you gathered in the competitive analysis to help you find areas where you excel. Also consider who your primary demographic is and how best to reach them.
3. Identify business trends
Stay ahead of your competition by implementing new and upcoming business strategies before others can. One of the best areas to use this strategy is in marketing. Keep up with the latest trends, particularly digital and social trends, and create alternative marketing approaches that set you apart from your competitors and introduce your product or service to a new market.
4. Improve quality
Find ways to improve the quality of your business. See if you can introduce higher-end materials in your products for superior longevity as compared to your competitors. Consider adding to your customer service team to better meet the needs of customers. Regularly assess your company’s overall quality and establish best practices for increasing your business’s quality.
5. Increase awareness
Finally, work with your marketing team to increase brand awareness. The more people know about your company and the value it can offer, the more people are likely to become customers. Use the information you gathered from your competitive analysis to highlight the benefits your company offers to consumers that others in the market do not. Try engaging with prospective customers with new marketing strategies.
Tips for improving your competitive edge
If you’ve established your competitive edge and want to develop it for greater dominance in the marketplace, use these tips to help you continue to improve your value:
- Increase prices:It might seem counterintuitive, but increasing prices can be just as effective as decreasing prices. Prestige pricing, or increasing prices to project luxury status, can engage a new demographic.
- Use influencers:Harness the power of celebrity by employing a well-known social media presence to promote your product or service. You’ll gain access to new potential customers.
- Become an authority:Demonstrate your expertise and establish yourself as an authority in the industry by speaking at industry events and producing educational content for potential customers.
- Define your niche:Don’t try to appeal to every potential customer. Instead, target your value proposition to a specific demographic most likely to want your product or service.
- Surprise your customers:Find ways to reach out to your customers with thoughtful or personalized gifts periodically to demonstrate your appreciation.
- Differentiate your product:Examine your product and compare it to your competition. Find a way to differentiate your product so it’s more appealing to your customers.
Identifying your competitive edge can improve your company’s profitability and hold in the marketplace. With careful analysis and thoughtful planning, you can increase your business’s competitive advantage and improve your market share.