How do I identify my competitive advantage?
How do I go about identifying my competitive advantage? Socrates said that acknowledgement of our own ignorance is the first step towards true knowledge, and Coleridge said we cannot make another comprehend our knowledge until we first comprehend his ignorance. How does this play into identifying my competitive advantage?
It's funny because a competitive edge is not really an edge, but an intersection of what you do perfectly with what your market needs. Is it your expertise, proprietary system, pricing structure? What do you do that no one else can say they can do as it relates to solving a client's problem? What product or service do you offer that no one else can say they offer as it relates to solving a client's problem? I work with clients all the time on their branding and positioning and it's a 2-part process. The first is knowing about you. The second is understanding what your customer needs. Find someone who can help you with this because your positioning is a critical business sweetspot, and it makes no sense to invest in marketing without knowing it. To your SWEET success!
In my experience, the first step in identifying your competitive advantage in most situations can be summed up in 3 words: Do Your Homework. Look at all of your potential client's platforms and profiles. When possible, talk to their customers and their vendors about their experiences with your prospective client. These steps should give you some specific ways you can add value to your soon-to-be client's mission, goals and objectives. Create a compelling story in concise elevator speech format and voila! competitive advantage identified.
Take time to work on the business rather than simply in the business
My experience has been that of delivering dramatic and pragmatic improvements in productivity, competitive advantage, bottom-line profitability and savings, and, providing “Analytics Visualization” - building metrics dashboards to drive performance, translating strategic objectives into operational goals / focus, tying KPIs to outcomes and economic value, while using Systems for Organizational Management, providing road map for navigating complexities while targeting results - even in heavily regulated environments.
A-A/C Duct Cleaning
B-Kitchen Duct Cleaning
C-Sawage & DrainLine.
D-Coils & Cooling Towers Cleaning.
E-Water Tank & all Kind of Tanks Cleaning.
Eliminate everything you can't outperform. If that is price, warranty, guarantee, etc just hope and pray that whatever is left on the list is worth mentioning or you'll need to get creative fast.
Interesting question, and unlike some of the other replies where it comes during the business plan (or engineered from day 1), I think this is a question you need to continue to ask you/ your business on a regular basis.
When we set up our businesses, we believe we are the best/cheapest/most technically competent company/person to do this (we wouldn't set it up if we didn't), which is great, although, its our opinion, and our perception of competitive advantage could be swayed by our features.
I get businesses to look at some simple, but enlightening questions (they aren't always quick answers):
> Why would someone/a business buy from me?
The next question, starts to ween out some of the competitive information
eg. - So what if we are the first to do x.
- So what if we have a tool that makes x go faster
A SWOT analysis will tell you what your suggested competition is doing, you can then compare your Strengths and Weaknesses into a comparison table with the competition Strengths & Weaknesses.
The SWOT will draw out the "Features" of the FAB's information, its down to you, to then identify the Advantage, and the BENEFIT. and thus give you the basis of the Competitive Advantage.
There are lots of templates on the internet, but the key to understanding competitive advantage, is to also understand what a potential client NEED's.
Your advantage to a company that isnt interested in what colour it is, may also be a weakness to the client.
Good luck, and hope my thoughts help
First of all you should know your strength and weakness. and try to find out how best you can get you weakness fulfilled and use your strength to compensate that weakness. Knowing, i.e. exploring yourself is very important.
Then you should explore a market where you can utilize your strength by exploring other's weakness.
Honestly, I'd start with a basic SWOT (Strengths, Weaknesses, Opportunities, & Threats) analysis of both your business and all of your competition. It can be a long exercise, but it can definitely help you identify areas in which you can call out your differentiation, look to expand, a world of options!
Here's one place to start: http://www.mindtools.com/pages/article/newTMC_05.htm
For info on SWOT analysis in general, check out Wikipedia: http://en.wikipedia.org/wiki/SWOT_analysis
Only once you have a full understanding of how your competition sits in the marketplace can you identify areas in which you can stand out with a competitive advantage.