How to establish your competitive advantage
The Lombard Accountants team understand that knowing what it is that makes someone choose your products and/or service over your closest competitor is critical business information.
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 brand appeals to your core customer base.
So what should you ask yourself? Here are some questions to consider from the Lombard Accountants team:
- Were you first into the market? – If you’ve been a true innovator in your sector, you may have been the very first company into your current market. Whether that’s a new kind of software app, or a unique piece of farming equipment, you need to protect this position and ensure you stay the dominant player in your new niche.
- 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. As such, you need to protect your intellectual property (IP) and file patents and copyrights for all the relevant IP that gives you your competitive advantage.
- Are you niche specialists? – Your competitive advantage may be that you offer a truly niche specialism, where there aren’t many competitors in this particular market. To protect this dominance, it’s important to maintain your high-quality service, to work closely with your customers and to remain at the cutting edge of the specialism.
- Can you differentiate your product/service? – Does your product stand out from other similar products offered by your competitors? The more unique you can make your offering, the more likely it is that your brand will be the one that people turn to. You can differentiate by features, price, customer service etc. to make sure you’re the stand-out option for customers in this market.
- 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 being 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?
- Does your brand have wider appeal? Do your customers identify with your brand in a profound way, and do you have ‘fanboys/fangirls’ who are advocates for your products? It could be that your company philosophy, your values and the way you interact with your customers all offer something unique that draws in customers and makes them stick with your brand.
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