Competitive Business Strategies
A competitive advantage allows a company to produce or sell goods more effectively than another business. Business owners commonly develop business strategies in order to maintain a competitive advantage. Several types of strategies are available in the business environment. Business owners can use standard strategies or develop their own strategy. Flexibility is an important feature of competitive business strategies.
1.
Cost Leadership
2.
Differentiation
3.
Price Strategy
Understand the Competitive Advantages of Competitors
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- What to Cover –Carefully evaluate established or emerging competitors in the market to identify their strengths. Consider their weaknesses and what opportunities this creates for a new company to potentially establish a foothold in the market by addressing those gaps. Also evaluate companies that have established a leadership position in other markets for ideas and examples of how competitive advantages can effectively be developed. Review what is known about the competitive landscape to understand factors in the external environment that may be a source of competitive advantage. Then, name the competitive advantages that these companies have developed (i.e., what they do well that others cannot easily imitate), as well as the business strategies they have put into place to capitalize on them.
- Where to Look –
- Analyst Reports – If players in the competitive landscape are public, carefully review analyst reports for clues regarding a company’s core assets, strengths, and sources of competitive advantage. These publications may also provide information about the chosen business strategies of public companies.
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- Personal Networks – Network with individuals in the field to gain insight into the competitive advantages and supporting business strategies that have been chosen by these companies, how well their strategies support their competitive advantages, and any difficulties they have encountered along the way (which might translate into opportunities for a new competitor).
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