How To Build a Competitive Advantage

With a blog title of “Your Competitive Edge”, I remind myself to try and post topics that will help business owners to gain just that; a competitive edge. Of course making small, incremental improvements in many areas of a business will always help to improve the competitive situation of a business. But what should be the main, over-arching strategy that an owner should follow in order to direct all other activities in the business and ensure efforts are going in the same direction? Where does our competitive advantage lie?

Competitive advantage can be simply stated as: Something your customer considers extremely important, at which you excel. If this advantage is something that your competitors find very hard or impossible to copy, then you have a sustainable competitive advantage. That’s even better.

Competitive advantage can be gained through price, differentiated products or services, or niche strategy. There is a saying that a business can offer Price or Quality or Service. You cannot successfully offer all three at the same time and expect to remain profitable. At best you can offer two. Deciding on which one or two you have a natural strength in will help you develop a competitive advantage strategy and focus your efforts where your chance of ongoing success is greatest.

I suggest you take the following test. Be as objective as possible and score yourself in each category:

5=We are the best in the industry
4=We are better than average
3=We're OK
2=We stink at this
1=Say what?

Controlling our supply chain. [ ]
Setting up channel partnerships. [ ]


We have great products/services. [ ]
Basic research and development. [ ]


Creating marketing materials. [ ]
Building customer relationships. [ ]


Keeping existing customers happy. [ ]
Getting customers to refer prospects. [ ]



Total each pair. The highest numbered pair indicates your core competency.
Match that with the strategy you should embrace, below.

• First pair is highest: embrace a “lower your price” strategy.
• Second pair is highest: embrace a “uniquely better product” strategy.
• Third pair is highest: embrace a “hassle-free experience” strategy.
• Fourth pair is highest: embrace an “ownership of results” strategy.

Warning: if no pair adds up to more than 6, your company may not be a viable competitor.

For help in relating this to your particular situation and tailor making a competitive advantage strategy for you, please contact me at andyburrows@iconbusinesssolutions.com or post a reply below.