Once a clear picture of the company and its environment is to hand, specific strategic alternatives can be developed. To achieve superior profitability, the company should seek to develop a competitive advantage over its rivals.
Competitive advantage consists of identifying the elements on which the customers’ preferences are based and of succeeding in characterising your offering so that it is perceived and assessed positively. It must be an advantage that a company has over its competitors. Competitive advantage gives a company the ability to generate greater value. The more sustainable the competitive advantage, the more difficult it is for competitors to reduce its effect.
The aim of the following questions is to assist you in drawing up a statement of the company’s competitive advantage:
- What makes your business different from the competitors?
- Why should you succeed where others have failed?
- What are the weaknesses of your competitors?
- How can you take advantage of these?
Competitive advantage is the result of a process that starts with the resources available to the company; the combination of these in the routine administrative activities of the organisation leads to the acquisition of specific organizational capabilities. If the combination of factors is optimum, in terms of efficacy and efficiency, then the organisation is on the road to becoming an excellent company. However, this is not enough, because it is necessary to put these distinctive capabilities into practice within the company, so that they can be repeated, or become part of the organisational routine.