How do you identify a competitive advantage?

Identifying your competitive advantages is a crucial step in strategic planning. They are necessary for the growth of the company, so they must be extremely solid.

A competitive advantage must allow a company to distinguish itself from others in its field of business, but it must also be difficult to replicate quickly.

That’s what will give the company a head start. A competitor needs to invest a lot of time and money to get things done the same way. Something as simple as offering a quality product is not enough to be considered a competitive advantage.

Three examples of a competitive advantage

1. Technologies

Technologies used by the company to produce a product, to manage customer relations or to improve internal relationships can be considered a competitive advantage.

It’s obvious that technology is always evolving rapidly. But a company that is first to do something will be well ahead of others trying to do the same thing.

While world-renowned companies such as Amazon, Airbnb and Uber are banking on technologies, there are also local examples. Lufa Farms, for example, have exceptional technologies for managing their customer relations in terms of order taking and management. They always know where an order is.

2. Brand awareness

As a competitive advantage, you can also rely on brand awareness. Some products are so well-known that we refer to them by using a brand name. For example, an electronic tablet is often referred to as an iPad. That says a lot about the popularity that Apple has managed to create for its product!

It may not be realistic for most companies to achieve this level of popularity, but a good marketing plan combined with prioritizing quality and reliability enables many businesses to stand out from the crowd.

3. Customer service

Distinctive customer service can also be a competitive advantage.

For example, PMCtire, a business in Sherbrooke, Quebec, sells tires on its Web site and has experts on the line who give advice. The order is shipped very quickly.. This company is conquering the Canadian market with its concept that customer service supported by efficient technologies is extremely powerful.

How to create a punchy competitive advantage

While companies will generally rely on a few competitive advantages along the value chain, sometimes only one is enough to stand out. Think of a company that holds the only licence in North America to sell a type of specialized equipment.

An ongoing quest

While a competitive advantage must be difficult for the competition to replicate, this does not mean that it is impossible to achieve. Thus, companies must continually work to strengthen their competitive advantages.

For example, companies must always keep a close eye on the market and adapt in order to continue to meet demand. A competitive advantage may have to be dropped at some point. For example, let’s say a company offers exceptional product quality, but customers are no longer willing to pay the price for that quality. It’ll have to bet on something else.

Survey customers and industry specialists

To analyze a company’s competitive advantages, you must look at various data, and survey clients and industry specialists. This exercise requires that the company’s leader be open-minded. They must be ready to hear the good news and the bad news.

However, many executives underestimate the importance of continually thinking about the company’s competitive advantages and ways to strengthen them.