5 Ways SMEs and CSOs Can Gain Competitive Advantage

Do you feel some businesses thrive more than others in our competitive world? Yeah, you probably tagged it as pure luck. But, we call it competitive advantage.

As a business owner, one of the most important things to consider is distinguishing your brand in a competitive market.

Why Should Customers Choose your Brand Over Competitors?

The answer is far from simple. Sometimes, it can be tricky to develop that edge in a way that makes sense to both you and your customers.

Few strategies will help you take advantage of the competitive market. But first, you need to define what it means to have a competitive advantage.

What Is Your Competitive Advantage?

A competitive advantage is an attribute that sets your business apart from others. By conducting research and evaluating the strengths and weaknesses of competitors, your competitive advantage increases revenue for your business.  

Marketing includes identifying your target market, understanding growth strategies, and assessing your competition. Check our previous articles to find out more about target markets and growth strategies. 

Following these steps ensures that your competitive advantage is distinct rather than generic. To make things easier, we compiled a list of tools to help you gain that unique competitive advantage.

However, before providing a list of tools, we will tell you about the core principles in competitive strategy analysis.

 

Principles of Competitive Analysis

• Conduct an Internal Analysis to identify the strengths and weaknesses of your internal environment. Select  appropriate tools, acquire information, analyzing and convey your findings
• Complete an External Analysis by running a background check of the external factors that control the impact of your business.
• Share common findings after analyzing the differences between internal and external factors.

Tools for Analyzing Competitive Advantage

Here are some tools for analyzing your competitive advantage.

• Porter’s Five ForcesPest Analysis
• Swot Analysis
• Gap Analysis
• Vrio Analysis

PORTER’S FIVE FORCES

Porter 5 forces provide a bird-eye view of the current market in which your business competes. By asking questions like, would it be difficult for new entrants to appeal to customers? Who are your major suppliers in the market? Is there a profitable market for your product in the area? What differentiates your products from others? Is the market shrinking or growing?

Once you answer the above questions, 

Create a strategy to ensure your business finds profit in the market.

However, we recommend not to rely solely on Porter 5 Forces as it is a one-dimensional framework disregarding complex situations.

For a hands-on analysis of your market report, visit somethingelsegroup.com. We provide comprehensive brand strategy services that simplify complicated problems.

PEST ANALYSIS

PEST is an external strategic framework for evaluating the environment which influences the success of your business. It consists of Political, economic, social, and technological factors essential for the framework used in corporate strategy. Below we break down each factor to understand their current position and how they may affect your sector and business.

Political Factors

PEST Analysis considers the political factors, such as government policy, taxation affecting the economy and the industry.

Economic Factors

Economic Factors focus on the various parts of the economy and how their performance may impact your business. 

Social Factor

Social factors consider society’s cultural and demographic trends.

Technology Factors

Technology is linked with modern innovations in the industry as well as the growth and innovation within the economy.

SWOT ANALYSIS

It is a simple strategic tool for leveling your brands’ competitive edge. It addresses both the internal and external aspects of your business.

When conducting a SWOT analysis, it is critical to present detailed and reliable data; otherwise, you may depend on unreliable information.

SWOT analysis provides quick insights, yet it barely offers a thorough analysis outside its four primary functions.

GAP ANALYSIS

GAP is an internal analysis tool for identifying the shortcomings in your business preventing you from meeting your objectives and goals. The analysis compares your brands’ current state to its planned future state. It identifies gaps which can subsequently create a series of actions that will bridge the irregularities.

Additionally, this is one of the most effective strategies that help coordinate your goals. More still, it lacks focus on analyzing  competitor’s gaps, government involvement, and seasonal changes.

 

VRIO ANALYSIS

The Vrio analysis framework identifies organizational resources that create a long-term competitive advantage. It identifies and categorizes your resources based on whether they possess certain traits outlined in the framework.

The framework encourages you to take those resources to the next level, eventually developing a competitive advantage. Since the Vrio framework focuses mainly on internal analysis, it can be time-consuming and needs other frameworks.

In a complex market environment, your business needs a competitive advantage. With these simple analytical tools, you stay a step ahead of the competition.