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How to Prevent Your Competition From Replicating Your Competitive Advantage

Josh Carlyle

In the hyper and intensely cut-throat business environment that most companies operate in today, it seems hard to establish a competitive advantage, let alone maintain it.

In fact, for many companies, sustaining a competitive advantage seems to be a harder challenge than establishing it, especially in industries with low entry barriers.

There are plenty of case studies about companies that has gone bankrupt after reaching their peak, losing their positions to rivals who were faster and more agile. One stark example is the famous Kodak Corporation.

Once renowned for its camera films, today it is a reminder of how important it is for companies not only to beat their competition but also to stay ahead of them.

A company’s competitive advantage is more about its capabilities than it is about its products or services. Although companies might establish a good market position because of their superior products, a company cannot make a superior product without superior capabilities.

A distinguished product might enable a company to reach the top, but it won’t enable it to stay there for any longer than the product’s life cycle allows. Furthermore, competitors will usually emulate the product, and fast.

Related Article: How to Stay Ahead of the Game Using Competitive Intelligence

Kodak was the first name to come to mind when thinking about taking pictures. Now it is not anymore. Sony also was a pioneer one day in consumer electronics and has successfully changed the image of Japanese products everywhere. Today its profitability has declined leading it to make decisions of restructuring in order to turn around its years of accumulated losses. The list goes on about companies who lost their edge in the market while seeing their profits being eroding by rising competition.

But not all companies must suffer the same fate. Managers who have a good understanding of the source of competitive advantage have a better chance of reaching a good position in their industries and maintaining it. The following advice can be considered for a longer lasting position at the top.

Find an Unnoticed Niche Market, and Keep a Low Profile While Serving It

Competitors will be eager to enter into industries which they deem to be highly profitable. They can only know you are making big revenues when you are not keeping a low profile. Especially for newly established and rising companies, it is important not to attract attention too early, when the company does not have the large resources to fend off competition and protect its market share.

Related Article: 8 Ways to Successfully Disrupt Your Competitors' Sales Funnels

Stay Current With How Demand Is Evolving

If the company is not developing its production to meet the evolving tastes and requirements of customers, then the best competitive advantage is short-lived. Demand is a constantly evolving and changing force, and the best companies are the ones that keep pace with it.

That requires an in-depth understanding of customers’ wants and needs. A good example of this is Airbnb, which provided customers who are looking for temporary and affordable hotel-like accommodation at lower prices, while at the same time giving the opportunity for homeowners to rent their houses.

Invest in Building the Right Capabilities

Competitive advantage ultimately stems from building the capabilities that are most relevant and needed in the current marketplace. The right capabilities guarantee that you can develop the right product for your customer at every time and maintain a market leading position. It follows from this also to let go of capabilities that have gone obsolete as they will only be a hurdle to developing the right capabilities.

Maintain Ambiguity About the Source of Your Superior Performance:

Perhaps your bigger strength is your superior customer service, or it is the optimum user experience (UX) you provide. Perhaps it is the technology used by the engineering department that makes the hardware of your products heavy duty. Regardless of what the underlying cause of your competitive advantage is, it is recommended that it is kept in the shadows from competitors for as long as possible in order to prevent the competition from replicating it.

Retain Your Best Employees

Competitive advantage stems from distinct capabilities, which in turn come from passionate, innovative, and engaged individuals. If your competitive advantage is based on technology, then it will be easily replicable, whereas if it is based on talented individuals, then chances are competitors won’t be able to imitate it unless you lose your best employees to them. Give your best employees ownership of work to make sure they are engaged, and make sure the environment in which they work nurtures their best performance.

Strike the Best Relationships With the Best Suppliers

The best suppliers are also a source of competitive advantage. Their cooperation will pave the way for remarkable market results. Striking the best long-term relationships with them will make sure that you are their preferred customer and that they support you in maintaining your edge in the market.

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Despite the unfortunate fate of many companies who could not stay adaptable and weather the storm of competition, their stories hold a lot of lessons that can be taken to heart by aspiring entrepreneurs and executives. Companies like General Motors can teach us that being in the lead at one point doesn’t guarantee supremacy all the way through. Establishing competitive advantage is only the first step, and maintaining it is indeed hard work. Yet, it is worth all the effort.

Image Credit: Monkeybusinessimages / Getty Images
Josh Carlyle Member
Business: Josh Carlyle is a blogger, professional writer and executive marketing manager at Clever Networks - UK-incorporated international e-commerce company. He was born in the UK and that is where he finished studies (Glasgow, Scotland) and gained proficiency in digital marketing and online education. Since that time, for more than four years he has been blogging about marketing innovations and emerging online markets. The skills and experience crafted in digital marketing and the e-commerce companies crafted a distinct vision on business procedures, along with knowledge in management and micro-management. Josh is here to share his ideas and insights, taken directly from the forefront of online business, from a perspective of a manager and chief executor in a growing company. Topics that he will be covering include, but are not limited to online marketing (content promotion, social media and search engine optimization), micro-management and motivation, sales in the digital era, education and personal growth. Tune in for a fresh point of view. Follow Josh on social media!