A business or company must have the advantage to survive the intense competition. Some businesses, such as those in the automotive industry, can gain a competitive advantage by consistently nailing their market before anyone else. Others may be able to gain an edge by utilizing new technology, cheaper prices, or something entirely different.
Some of the most important ways that a business can have an advantage over its competition include having high-quality products and services, offering value beyond just utility (this is usually done through branding), staying under budget plus also improving quality and efficiency while increasing revenues every year, and being more innovative than your competitors.
Eight Ways A Business Can Gain A Competitive Advantage:
1. Research And Development (R&D)
Businesses, especially of the manufacturing type, must be constantly innovating to increase quality, efficiency, and innovations. This is something that will improve the company’s competitiveness while also making its product more desirable.
One way to keep up with the times and stay competitive is by making sure that your R&D department is working hard on new products and introducing them to the market. It’s important to understand how customers want your products to perform and how they are looking forward to new products that are created with that in mind.
Innovating in this way allows businesses to continually stay ahead of their competition. It also starts an internal discussion about how the company can make itself better through research and development. These conversations ultimately lead to more revenue than if you were just focused on internal revenue-generating activities.
2. R&D Tax Credits
Many companies have found success with R&D and have been able to claim certain elements of the research as tax deductions.
So, what is r&d tax credit? Well, it’s simply a government scheme that allows you to write off any losses or debts that you incur from your research and development activities. It’s essentially a tax break for companies that are focused on improving the quality and efficiency of their products.
The government sees this as an investment into the future of these companies as R&D is essentially a cost that they can write off to produce innovative products in the future. Without being able to claim these losses against their profits, companies would be less inclined to spend money on research and development activities.
3. Cost-Cutting Activities
Businesses need to become more efficient and cost-effective to stay competitive in today’s market. Outsourcing departments such as accounting, HR, and Marketing can help to reduce costs and improve these functions. Offshoring and/or outsourcing can also be extremely helpful as it allows companies to move away from highly populated areas.
In this digital age, you’ll also want to consider outsourcing certain functions such as email, website management, account maintenance, and social media.
There are plenty of companies out there who can help you handle these functions while remaining competitive and improving your brand image. Outsourcing activities such as these are a great way for businesses to improve overall efficiency while simultaneously reducing costs.
4. High-Quality Products or Services
Many companies can differentiate themselves from their competition by having high-quality products or services. This is done by being innovative with your product offerings or by continually investing in the quality of what you’re selling. This also reduces the pressure to compete solely on price.
A business or company must have the advantage to survive the intense competition.
5. Quality Control
The quality of the product or service being offered should be high so that customers do not purchase a competing brand instead. Companies need to constantly check their production processes to assure that they are producing the highest quality products possible.
Companies need to find ways to improve upon their current efficiency to be able to make products of better quality for cheaper prices than competitors can offer.
Businesses that are constantly innovating and improving the quality of their product while reducing the bottom line can become extremely competitive in the marketplace.
6. Lower Prices
A business can gain a competitive advantage by offering its products and services at lower prices than its competitors. This is usually done by finding cheaper ways to produce a product or manufacturing your product in less-expensive locations.
Another way businesses can offer lower prices for an otherwise similar product is by adding value in other ways. Adding value may come in the form of better customer service, greater efficiency, or extra services that may be included with your purchase.
7. Gain Competitive Advantage Through Customer Data
A company that can gain an advantage through customer data can do so by providing customer-oriented products and services.
Some companies have dedicated departments that are solely focused on gaining a competitive advantage through customer interface. These departments are usually in charge of running customer surveys and being able to take the information gained from these surveys and use it to create promotional material that will benefit your business.
This is done using customer feedback to improve its services while also making sure that its customers do not spend their money with other companies because they received better service at a lower price from you.
8. Marketing Shifts Within the Industry
The new age of technological innovation has exposed a whole new way for companies to gain a competitive advantage through marketing campaigns. Companies are now able to use social media and other digital resources to market their brand while also focusing on a positive customer experience.
These marketing campaigns are less centered around advertising and more focused on creating a great customer experience that benefits both the company and its customers. The idea behind this type of marketing is the more engaged you are with your customers, the better products you’ll be able to create for them, and vice versa.
Creating a product that is useful to your customer will not only help you gain their loyalty but also engage them through positive word-of-mouth and social media sharing.
This has been an especially important marketing shift for companies offering physical products. There are numerous ways in which industries can gain a competitive advantage.
It’s important to keep in mind that these competitive advantage strategies are not mutually exclusive. Generally, businesses use several of these competitive advantage strategies at once to stay ahead of the competition.