How To Have Competitive Advantage In Your Business

competitive advantage strategies

Do you want to have a competitive advantage in your business and dominate your industry?  Do you want to stop crawling and start flying in your business? If your answer is Yes to any of this question, then this article is for you.

 

You see, if you are presently struggling or not making enough sales in your business, the problem might not be that you don’t have a good product or offer good service. Here’s the fact, very few Business owners struggle because of poor good or service.

Then why do Business crawl or miss out in business? Well, one of the reasons is the LACK OF COMPETITIVE ADVANTAGE. Competitive advantage is what differentiates you from others. It is what makes you not to compete but dominate in your industry. If you lack a Competitive advantage then your business is likely to constantly make little or no money.

 

Most small and medium businesses tend to compete whereas they lack competitive advantage. And it was Jack Welsh (former General Electric CEO) said: “Don’t compete when you don’t have a competitive advantage”.  As a principle, all Jack Welsh cared about was winning. If a company or division at General Electric was not first or second in its industry, it would be sold or closed.

 

 

The truth is that lack of competitive advantage has eaten up a lot of Businesses especially SMEs. You see, people will prefer to do business with who they perceive as the best in the industry and not everybody else. However, for you to be perceived among the best, you must have a competitive advantage over the rest. If you’ll have an advantage over your competitors, then you must have a competitive advantage.

Most Businesses try to do business just like everybody else and expect different results and profit.

Well, the result is FRUSTRATION.  This is because you must be different for you to get different results.

If you compete directly alongside the heavyweight of your industry, there’s a high probability that they will win you. They’ll eat you up like a shark eat a tilapia and you’ll have little or no customers.  Why?  Well, here are some of the reasons:

  1. They have more resources to utilize than you have.
  2. They have a large advertising budget than you have to target their target audience.
  3. They have more money to utilize for bespoke branding than you do.
  4. They have resources to enhance their brand visibility
  5. They have more resources to do give away, reward loyal customers, etc.

The resultant effect of this is that your targeted customers will know them, like them and trust them than you. And once they’ve successfully built their KNOW, LIKE and TRUST factor, they’ll become irresistible to your targeted customers.

So how can you have a competitive advantage in your industry?

 

The number one way is to be a big fish in a small pond rather than a small fish in an ocean.

 

What that means is that you have to NICHE DOWN. Well, your money isn’t in competing directly with them; your own money is in the niche. You’ll make more money when you niche down rather than competing directly with your competitors. Chose to position yourself as an expert in a particular niche rather than claiming you can solve everybody’s problem or can serve everybody just like the big fishes.

 

Have you ever come across the phrase “Riches are in the Niches”. Well, that saying is truer than true.  Chose to be a big fish dominating a particular pond rather than a small fish in an ocean. They’ll eat you raw and you’ll close down your business or continue to struggle. Because, if you fail to niche down. Most likely, you’ll be a second option and people will only patronize you if the big fishes run out of product.

Here’s it.

People tend to do businesses with who they perceive as an expert. Therefore, your job is to niche down from the general by clearly defining a niche for yourself and dominate in that niche.

 

competitive advantage strategies

When people perceive you as an expert, they’ll do business with you. 

 

Imagine someone you know is sick, (just an illustration) and surgical operation is needed. Who would you prefer to carry out the operation?   A Surgeon or a Medical Doctor with no specialization? Of course, you won’t think twice before picking a Surgeon. Why? The surgeon has a niche down and therefore will be trusted for surgical operation than the doctor who is a generalist.

Here’s another example, you want to sow a wedding dress and you had two options, a fashion designer who makes only a wedding dress or a fashion design who makes all types of dresses. Who will you prefer to make your wedding dress? Of course, the one who chose to specialize in making a wedding dress.

That’s the power of Specialization or niching down. That’s the only way money can come to you.

Do you want more?  I guess you did.

Here’s another example.

Who will you prefer to repair your laptop? An engineer who specializes in all types of gadget repairs or an engineer with specialization in laptop repairs? Of course, your answer is obvious because you’ll choose the one with specialization.

Specialization or niching down helps you to have a competitive advantage over your competitions.

Now, here’s where it gets more interesting…

There are two basic ways to niche down.

  1. Niche down based on who you are serving.
  2. Niche down based on the product or service you’re offering.

Let me explain better or shouldn’t I? Of course, you want me to. So here we go:

1. Niching Based On Who You Are Serving:

Instead of serving everybody, you can choose to serve a specific market. You can choose to make your business for those that can afford luxury alone e.g Apple product are such as iPhone, Ipad, etc not targeted at everybody but just for people who love luxury. Therefore, they are very expensive because the products are luxurious. Unlike other phone types such as Tecno, infinix, itel, etc which are less expensive based on who their target audience is. Here’s, another example, instead of unnecessary competition with other content writers, you can choose to focus on creating content for a specific market e.g Technology, politics, economy, religion, children, etc.

As a Behavioral Therapist, I chose to serve only Entrepreneurs, That’s an example of niching down based on who you are serving.

As a social media manager, you can choose to be a social media manager for a fashion niche, small business owners, etc. Rather than serving everybody, you can choose to make your business B2B (Business to Business) or B2C (Business to Consumers). Rather than selling food to everybody, you can choose to focus on selling to organizations, etc.

There are a lot of possibilities when you niche down in who you are serving. You are seen as an expert in that niche and people will start buying or patronizing you.

 

 

2.  Niching down based on Product or service:

You can also niche down based on what you offer e.g product or service. e.g. Instead of being just a Barber, sell convenience, chose to be a mobile Barber where you visit people to barb their hair. Instead of sewing every clothes, specialize in a type of clothe. KFC is about Chicken and chips. Is it that they can’t cook anything else? Of course, they can. But if they try to, they won’t dominate the market.

Instead of being just a business consultant, you can niche down to bring a social media consultant, marketing consultant, business development, etc. That’s the power of the niche.

When you’re well-grounded and dominating in a niche, you can then diversify into bigger niches. When you dominate a particular niche, people will always patronize you.

You have the opportunity to dominate better when you are in a niche market.

Irrespective of how overpopulated your industry is, there is always opportunity to niche. You’ll be surprised of how many people are eager and ready to do business with you when you operate in a niche market.

So find a niche and dominate. By so doing, you’ll have a competitive advantage over your competitors and make more money in the long run.

So, Over to you? Do you find value in this post? Kindly comment below and share your thought.

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