How to gain competitive advantage
To gain competitive advantage in business is possible even in a seemingly saturated market. Almost in every industry line you can think off, everyone is fighting for a fair market share. If you must remain in business, you have to win enough market share to make enough profit to keep the business running. When your business fails to do so, then the death of the business is inevitable no matter the amount of money you pump in. These 7 points will guide you on how to gain competitive advantage.
This can help your business deliver better products with ease while reducing the time spent in production and cost of production. Technology on its own doesn’t affect the market share of a product if it doesn’t lead to production of better product that leads to product differentiation or reduce time and cost of production.
With help of technology, companies like Intel associated to telecom industries have developed larger memory sizes and high speed processors with thousands of circuits just in one chip less than 1cm in size reducing the inconvenience of carrying large sized phones and computer. These miniaturization has helped to give a competitive advantage to telecom industries who maximize the technology in better ways. These days, the flatter and smaller the devices, the more appealing and enticing it is.
Same applies in agriculture with Nigeria as a case study. With the lack of milling machines readily available for farmers to mill their locally made rice to give a well finished produce, they seem not to be able to compete with imported rice and food stuffs despite a reduction in price in their fight for market share. It’s not the technology but the leverage it gives.
Which business are you in engaged in? What technology would you need to make your product better with less time and cost? Find it and embrace it.
When people think of gaining market share, they think of price reduction which gives rise to price war. Consumers know the difference between quality and price. The key is to offer quality products and put it in the hands of people who value quality over price. A way to do this is through marketing and brand awareness or great launching
Related: How to have a great launch.
This might not mean price reduction. You can literally increase your market price even when the cost of production is vividly low. This is an advantage companies with reputable brands enjoy because they have been able to gain trust in business.
Almost everyone think in terms of price reduction. The opposite can be yield great results as well. If you don’t have better product to compete with or your focused market is low income earners then price reduction is the key you need for a competitive advantage.
Every product have has a geographical niche it thrives most. Low cost technology thrives well in Africa while high cost technological devices like apple, huawei and Samsung are a norm in America and Europe. This could be due to economic strength, income earning ability, weather conditions as most products are targeted at hot or cold regions especial clothing products.
Another way to look at it is to know the environment less dominated by your competitor, understand why they are not there yet, if favourable, then dominate the location and break out of competition.
5. Gender differentiation.
This is another way to break away from competition. Either gender differentiation or gender combination as the case maybe can pull you through. Some businesses in order to reach more market started making unisex products or started producing for male gender added to their female gender (gender combination).
If your competitor is gender focused on male products, you can replicate the product for female gender with better quality while considering colours or features that appeals to your targeted gender.
6. Age differentiation:
Diapers are always associated with kids but as competition increased coupled with needs, some companies started producing adult dippers. Same applies to consumables, children’s milk are made and other companies focus on skimmed milk for old aged people. All will have their own market niche and thus, share.
One can actually make a product targeted at people with special need of assistance. E.g shoes for people with leg impediment, special food for the diabetic, etc. Find a focus and get out of the competition.
7. Emphasis your differentiation:
Indomie noodles has been running ads even when it was obvious they were seemingly enjoying monopoly in Nigeria. However, when other brands emerged, their mode of ads became more focused in making the market conscious of how their product is the best in market By emphasizing their key differentiation. Thus, the statement “The difference is in the taste” while someone else responds in return “The taste is the difference”. And indeed, their uniqueness was in the taste. Their price was the highest in the market. Their differentiation excluded them from the price war.
Read more: How to get out of the price war.
If you must emphasis this to the market, you must live true to it. If your product doesn’t have what you claim it has, emphasis on differentiation will make your product die faster and phase out. You can focus on “zero cholesterol” differentiation, low sugar diet, “fire/water proof clothing fabrics” anything at all but live true to it.
What can you differentiate your product with?
8. Value added services:
An example of this can be the buy one get 2 free kind of services. Telecom companies do this. Buy airtime and receive free 200minutes worth of calls after activation. Buy our product and we will give free installation services. This is called value integration. But if your focus is on maximizing profits, then value separation might yield you more money but don’t be sure of more sales except your competitors are asleep or you’ve other competitive edge above them.
In conclusion, most market are not without competition, you can single yourself out using any other strategies or a combination of them. And reach us with your success story.