Competitive advantage is a characteristic or aspect of your business that is unique and sustainable over time, and that differentiates it from any other company or venture that shares that market (that is, other companies that compete for the same public).
The concept of “ competitive advantages ” was coined by Michael Porter , an American economist, in 1980. In short, it is the ability of your business to stand out in its field through various techniques.
With this first overview of what competitive advantage is , let's learn a little more about the author.
Free ideas, strategies and tips
Subscribe and receive number library content on marketing, e-commerce , social media and much more!
Tu nombre*
Escribe tu nombre
E-mail*
El e-mail que más usas
Michael Porter and the competitive advantage
Added: In his analysis of generic business strategies, Michael Porter talks about two types of competitive advantage . However, he divides these types into three, according to market segmentation. They are as follows:
Cost leadership
Product differentiation
Market segmentation
In his text, he explains:
Competitive advantage grows fundamentally based on the value that a company is able to generate. The concept of value represents what buyers are willing to pay, and the growth of this value to a higher level is due to the ability to offer lower prices in relation to competitors or to provide unique benefits in the market that compensate for higher prices .
Keep reading to find out how knowing your competitive advantages could help your business !
What are competitive advantages for?
We have already seen what competitive advantage is , but if you want to understand why it will be useful to you, it is important that you understand that it is the basis on which you will build your value proposition .
That attribute (which can be more than one) makes your product or service the best option for the public that consumes that item .
That is, once you know what your value proposition is, you will know how to communicate to your buyers (or potential interested parties) what your competitive advantage is and develop your marketing strategy .
And, if you haven't thought about it yet, it's very important for your brand to be online when developing your business plan.