Do you know what is the competitive advantage? Well don't worry! Throughout this article you will learn in detail the best examples and types that exist and you can apply it.
Competitive Advantage
When referring to competitive advantage we are talking about the particular characteristics that make us stand out and place us in a superior position to our competition.
The characteristics that we can find regarding what competitive advantage means are countless, but among the examples that we can mention to give a few are fully qualified personnel, a privileged geographical location or access to low-cost energy sources.
However, one of the most important competitive advantages sought today is access to increasingly advanced technology and lower prices. However, maintaining these advantages is usually difficult to maintain over time, so it is necessary to find a way to develop and evolve these advantages to maintain the positioning we want with our brand.
Our goal is to find a way to create total customer loyalty and if at any time we do not have this additional help, they will continue by our side until we return to the position in which we found ourselves.
Types of competitive advantage
There are different strategies that companies can use to differentiate themselves from their competition, which we can find with three well-defined groups, which are:
cost advantage
We do not find this type of classification in organizations or companies that have access to raw material at very low costs, which allows them to enter the market with quality products and better prices. One of these examples of competitive advantage we see it perfectly in the telecommunications industry, when the Chinese phone company Xiamoi came onto the market and caused a stir for its high quality and prices considered very low when compared to Apple or Samsung, which made it quickly position itself in this market.
Having this type of competitive advantage allows us to correctly establish and develop different standardized products, which goes hand in hand with quality and better prices thanks to the acquisition of raw material directly without using resellers or retailers that make our prices rise more .
In the same way, we can achieve a competitive advantage in reference to costs if we apply design changes that reduce them. Generally this is found in packaging, colors, designs. However, it is recommended that the modifications be of this type and that they do not affect the quality of the product since we would lose the quality-price ratio that it cost us so much to achieve.
In different economic studies it has been possible to determine that the competitive advantage in cost reduction is achieved thanks to the experience and learning that has been acquired within that particular market.
The experience effect focuses on the accumulation of situations that has made us fully aware of the market. This means that new brands or organizations that want to enter the market where we are already experienced will have little information and experience that will make them make decisions that we may not make thanks to the experience we have achieved.
On the other hand, we find the learning effect that focuses on the workforce we have. It is necessary to understand that we must carry out inductions to the personnel that are entering and update workshops to avoid generating unnecessary expenses due to lack of experience. An example of this reference is that it is not the same for a company to have ten units of jackets due to manufacturing defects than one hundred and fifty for a production of one thousand jackets.
product differentiation
In this type of competitive advantage, the knowledge that the client has about the company will make the difference. When our customers know the quality of the product, in many cases the price they have to spend will not matter, since they associate it with high functionality, a clear example of this is Apple products, they are high cost but of excellent quality.
We must understand that this is a concept that entered marketing in 1980 and that focuses on solving the problems of customers, organizations, countries, among others; Detailed analysis of the competition. If you want to know more about this topic we advise you to enter the following link competition analysis
We must understand that if our organization has managed to position itself as a brand of quality, excellent service and attention to detail, we will be able to establish significant loyalty with our customers.
Being attentive to details and innovative and quality designs makes us stand out and obtain a competitive advantage of differentiation among our competition. Since we can definitely achieve the feeling of satisfaction on the part of our customers when they buy our products, since they are unique in the market.
To better understand this concept we leave you the following video for your enjoyment
As an organization we can differentiate our offers in many ways thanks to the fact that the techniques of our products are multiple. It is important to define what are the characteristics of our service or product and thus be able to expose it to the market in the best way.
If we focus on size, technology, security, service, size or shape, we are focusing on the characteristics that define our product and why it is necessary for our customers to achieve the dream. That is why it is important to be innovative and unique when launching a product on the market since it can enter a general market but it will stand out for its uniqueness.
In the same way, we can coherently analyze the needs that consumers have and be able to understand what is that additional thing that they are looking for in order to cover them. These types of characteristics are known as market trends and they are an analysis that must be done completely calculated so that the results they produce are the closest to our reality and to be able to take actions as a consequence of them.
On the other hand, it is important to know what our users and clients perceive of us in order to know the affective positioning that we have among them. If they see us as an honest, organized, detailed brand, with a high reputation, with values and a well-defined identity, we can ensure that our customers will return thanks to the characterization of our brand.
Competitive advantage in market segmentation
This is one of the strategies most sought after by the different organizations since it manages to understand the behavior of our followers and consumers. In this way, we can establish optimal marketing strategies for our business and our audience.
Market segmentation is widely used by small businesses that are just starting out as they do not have the necessary resources to reach the entire market. However, if they manage to master segmentation correctly while the brand is growing, they will be able to precisely study the different market options that are being born.
This competitive advantage makes us focus exclusively on the consumption needs of our client and on how we can improve their experience with our brand. For this, completely transparent feedback and first-class customer service are necessary.