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Business Strategy:What's Your Competitive Advantage?

Business Strategy - What is your competitive advantage

Competitive advantage…What do you think your business’s competitive advantage is? What kind of strategy does your company employ? Is it the cheapest in the marketplace? Do you offer a highly specialised service/product in a niche market?

If you think the strategy is to be the cheapest option in the market, aka Cost Leadership according to Porter’s Generic Strategies, you need to be sure that you can maintain this position. Companies who utilise this strategy usually have access to capital so they can invest in technologies to help reduce costs, they have efficient logistics, and they have a low cost base (like labour costs, material costs, and facility costs). The danger with this strategy is the ways one can reduce costs is not unique to you, other competitors can copy your strategy and compete against you. A good example of a company that uses this strategy is Walmart. They do a very good job at letting their customers know that they are competing on price, their slogan is “Save Money, Live Better” and offer rollback pricing for crying out loud. Then you have regional competitors like Real Canadian Superstore for example, who take up a bit of the Canadian market share by using a cost leadership strategy similar to Walmart, except they have tools such as price matching to show their customers they are the lowest option.

If you think the strategy is to offer a more attractive or better product/service than your competitor then you are employing a differentiation strategy. Companies who use this strategy need to be agile, have good research and innovation, be able to deliver high quality products/services, and be able to communication (better than your competitors) to the market what the benefits of your offering are. A good example of a company that uses this strategy is Apple. They differentiated their product by having a sleek design, being user-friendly, and having the ability to integrate with other apple devices to form its ecosystem. The danger with this strategy is having competitors with similar features who can communicate and have just as large or larger marketing budgets than you.

If you think the strategy is to understand and tailor your offering to a particular niche and serve them with a cherry on top then you would be following a focus strategy. By pursuing this strategy, since you understand the specific needs of this select market you tend to have higher customer loyalty and due to that less competition. As this strategy focuses on a niche of the market and not the broad market, companies can utilise their resources more efficiently. An example of a company that utilises this strategy is Rolex. They focus on individuals who appreciate and can afford luxury watches. People associate high quality, impressive design, and high reputation with this brand. The danger with this strategy is it makes you vulnerable to change in the market, such as taste preference. Another danger is that by focusing on one specific market you may overlook opportunities and thus could limit your growth potential. It is important that a company employing this strategy maintain flexibility and awareness of the market they serve.

Once you know the answer to this question then the rest of your strategy can be developed around this. If you need help figuring out which strategy is best for you, please get in touch with us at and we would love to help you position your business so it can move forward successfully.      


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