How can your business beat the competition, and what benefits can you provide that the competition can’t? Here are some ways that your business may be able to secure a strategic advantage against others in the same industry:
Added value: Can you offer added value in comparison to your competitors? Think 24-hour delivery, locally sourced product, a mobile service, or a quality of product or service that’s beyond industry norms.
Exclusive distribution rights: Do you have exclusive distribution rights to a sought-after product or service?
First cab off the rank: Do you have a new idea that nobody else has tried before? Or a new way of doing something that makes the product or service better, quicker or cheaper?
Intellectual property: Do you have unique intellectual property (IP) that customers want and that’s hard to copy? IP includes copyright, patents and trademarks. If you’re just getting started with your business, your IP could be as simple as a clever business name, an eye-catching logo or a well-chosen domain name (that is, a web address).
Location: If you’re a retailer, do you have a great location in a central shopping area? (Location is often the prime strategic advantage for retailers.) Or are you the only business providing a service in a particular suburb or region? Are the demographics of your location ideally matched to your business, or are you located in a central spot for freight and transport?
Lower costs: Do you have an innovative way of doing things that reduces costs, creates economies of scale or significantly improves business processes?
Obsession and drive: Do you have exceptional vision or drive? Is this drive connected with a particular obsession? (For example, think of Steve Jobs and his obsession about design.)
Perfectly matched team: If you’re in a business partnership of some kind, do you have a unique combination of skills and do you work well together as a team? (The synergy created by two or more people who have complementary skills and who work well together can be a force to be reckoned with, and something that’s hard for competition to copy.)
Specialist skills: Are you a specialist who has an insight into a particular industry that nobody else is likely to have? Maybe you can see a gap in the industry that nobody else is catering to, or maybe you can see a way to do something better.
Focusing on real-life examples
Try to deepen your understanding of strategic advantage (refer to the preceding section) by applying the concept to a few real-life situations that are easy to imagine. Picture yourself sitting in a room with four people and each of these people sharing their idea for a new business:
Leila plans to start a business mowing lawns in her local neighbourhood.
Tess has recently qualified as an acupuncturist and plans to start up a practice specialising in children’s health.
Dave has an idea to provide a mobile home-safety service, installing devices such as gates, cupboard latches and electrical safety switches to make homes toddler-proof. His partner is in real estate and has great marketing skills.
Shayne, who is a fashion designer with a large Instagram following, has partnered with a friend with photography skills to sell his services as a market influencer.
Referring to the strategic advantages listed in the preceding section, have a think about which of these advantages could be relevant to the example businesses. You can see how I’ve rated the strategic advantage potential for each of the four businesses in Table 2-1.
Have a look at Table 2-1 and see if you agree with my assessment of potential advantages. For example, can you think of ways that someone with a lawn mowing business could get an edge over competition with added value services, location or lower costs?
TABLE 2-1 Rating Businesses According to Potential Strategic Advantage
| Lawn Mowing | Acupuncturist | Toddler Safety | Market Influencer | |
|---|---|---|---|---|
| Added value | Maybe | Yes | ||
| Exclusive distribution | ||||
| First cab off the rank | Yes | |||
| Intellectual property | Maybe | |||
| Location | Maybe | Maybe | Maybe | |
| Lower costs | Maybe | |||
| Obsession and drive | Yes | |||
| Perfectly matched team | Maybe | Maybe | Maybe | |
| Specialist skills | Yes |
Justifying Why You Can Succeed
In this chapter’s preceding sections, I explore the concept of strategic advantage in relation to a range of possible businesses. I like
