Establishing your business competitive advantage
Why do customers buy from you? At Finlay-Mulligan & Co Accountants we understand that knowing what it is that makes someone choose your products and/or service over your closest competitor is critical business information.
Your competitive advantage could be something tangible, like a unique feature that your competitors simply don’t have. But, equally, it doesn’t have to be a feature at all – it might be your brand positioning or your customer service that sets you apart.
To drill down into the fundamental elements of your competitiveness, you need to ask some important questions about the nature of your products/services, so you know precisely why your business appeals to your core customer base.
If you are struggling to understand your business competitive advantage, ask yourself these questions compiled by the Finlay-Mulligan & Co Accountants team:
- Could your product/service be copied? – If you hold a unique position in your market, it’s crucial that your product/service can’t be copied and rolled out to undermine your position.
- Do you offer greater value? – Any transaction aims to bring value to your end customer. But are you able to deliver a better service or offer more value than your competitors? This may mean offering added value that can’t be matched by other companies; for example, your brand is more local, more sustainably sourced, faster to be delivered, or coming with better customer support.
- Do you offer a better price point? – Price can be a real differentiator, so you need to constantly be aware of how your prices compare to those of your competitors. Is your product cheaper than others? Or are you pitching your price at the top end of the market? The more competitive your price point is, and the more it’s linked to your unique value, the easier it will be to carve out a competitive advantage.
- Is there stable demand for your product/service? – do people need your specific product and what’s the size of the demand? Do you have a strong network amongst your customer base, or is a competitor gradually winning market share and undermining your supremacy as the market leader? This needs to be regularly reviewed and assessed.
- Is your product/service easy to buy? – The way you distribute your product or service can have a big impact on your market position. How quickly and efficiently can you deliver your offering to your customer? And do you have exclusive rights to a distribution channel that makes it easier for your customers to buy from you?
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