Tuesday, March 28, 2023

Competitive Advantage: What is it and what benefits does it bring?


In this article, we are going to explore this concept to discover Competitive Advantage importance in improving your performance.

In an age where there are multiple businesses with similar options, brands must compete with each other for customer attention.

The capacity for innovation, creativity, and the time spent creating deep and meaningful relationships with them will be the factors that will help you distinguish yourself.

To achieve this, the path is clear: you must know your audience ( buyer persona ) and offer them not only what they are looking for, but an extra; something that makes your proposal stand out from the rest.

The way in which companies position themselves depends on the characteristics that make them unique; that is, of the Competitive Advantages they present.

What is a Competitive Advantage?

Competitive Advantage: What is it and what benefits does it bring?
Competitive Advantage: What is it and what benefits does it bring?

The Competitive Advantage of your business will be that unique, singular, and sustained characteristic over time that distinguishes it from the rest of the companies.

They are those aspects that make a brand stand out or that a product stands out among others that offer similar options; features that add value and offer benefits to customers.

This will be the base on which you will build your value proposition and your entire marketing strategy, as it will help you position yourself in the market.

A Competitive Advantage must be unique: think about what detail makes your business different from any other. This is where creativity and innovation in the service of growth come into play.

Also, it must be difficult to imitate. Competitiveness means that companies are looking at each other for ideas to copy or improve. Make sure that your proposal cannot be imitated in the short term; otherwise, you will lose it.

Deep and constant changes in the market can put your competitor in a better position than you to exploit the advantage you found, so you should be very attentive to this point.

A third one follows from these two characteristics: it must be sustainable over time. This means that it needs to be detached from the very foundation of your business and not from an eventual characteristic.

The Competitive Advantage can be internal or external, depending on the aspect you decide to highlight.

The first has to do with the processes of each company. For example, the costs of production and the management of the product that you handle can allow you to offer quality at a low price.

The second, on the other hand, refers to what directly impacts consumers and makes them choose the brand. For example, quality services or customer service that bets on loyalty through promotions and contests, among others.

Once you define what your advantage is, do not stay static. Seek to add new ones and use the one you have in different ways to distinguish yourself.

You must adapt to a constantly evolving market. If you want to stay competitive, you must strengthen and develop the points that make you unique.

There are several types of competitive advantages. We will help you discover them so you can decide which one is best for your company.

“The Competitive Advantage of your business will be that unique, singular, and sustained characteristic over time that distinguishes it from the rest of the companies.”

Types of Competitive Advantage

You can build your business advantage based on different characteristics, according to your convenience. Here we bring you the main ways to do it.

Cost leadership

One way to draw attention to your company is to achieve the greatest possible savings in production costs without lowering the quality of the final product.

This will allow you a very competitive sale price that, for many customers, is the differential that will lead them to choose where to buy.

To be able to choose this type of advantage, you must take into account the state of the market in which your product or service will be inserted.

It is advisable to do so if differentiation is very difficult, or when it is a standard product offered by multiple companies with the same quality and the same price.

You can offer a competitive cost advantage once the internal processes of your business are well oiled. The main sources of these types of benefits are learning and experience.

Lowering production costs often goes hand in hand with the time it takes to learn how to make a product. As you specialize, you improve and optimize the tasks, which will later translate into a lower final price.


If your product has a feature that no other has and is valued as such by your customers, you can raise the sale price.

Your advantage will be innovation and added value. However, you must be sure that it is a price they are willing to pay.

This strategy is recommended if your customers place great importance on the complexity and diversity of the product to improve their social status or if it is particularly difficult to imitate.

The differentiation may arise from the characteristics of the product itself, the company, or the market in which it is inserted.


Another way to position yourself is to offer your products to a particular audience segment, focusing your efforts on a specific Niche Market.

In this plan, we are going to combine the two previous proposals, but we will direct them to a particular sector instead of covering the entire market.

To exploit this competitive advantage, you must define the specific needs of your customers and how your offer will solve them. The first step on this path is to segment the audience and choose who your business is going to be for.

Benefits of Competitive Advantage

Identifying what is the key element that differentiates your business will be very useful when building your value proposition.

Being clear about your Competitive Advantage will make you develop communication, marketing, and sales plans that focus on your strengths and the main points that distinguish you from the rest.

The fundamental factor is knowing how to make the most of it: you must put it as the flag of your business. The way you sell your brand matters more than the product itself.

Your company will be better positioned if you work on the aspects that make you unique. The Competitive Advantage will help you to be a reference in your field.

With this feature in mind, it will also be easier for users to find, identify, and choose you. They will seek you out if you make it clear to them the distinctive value you are offering them.

Key Elements of a Competitive Advantage

We talk about the characteristics of Competitive Advantage and the benefits that identifying it and using it as a strategy brings to your business.

However, it is also important to know what are the elements that compose it. Let’s delve into them.


It is one of the most relevant factors because it influences other decisions; for example, the possibility or not of proposing cost leadership.

The more accessible your product is, the more sales you are likely to get. But beware: it is about lowering production costs while maintaining quality.


Our second factor, then, will be quality.

To differentiate your brand, you must take care of its reputation and be attentive to details so that your users choose you over others.

If you offer a product designed with unique characteristics, the price will be in the background, even if it is not very affordable. When the value proposition is interesting and attractive, the customer pays for it.


Customer service can also be a factor that separates you from the rest. Providing a comprehensive, personalized, and unique service will help you to retain your consumers.

It offers not only products but – and above all – experiences. You can stand out if the purchase process is easy, friendly, and special for each user. The details are what matters most.


Finally, a key element of a Competitive Advantage is in the customers themselves.

Personalization is essential to build a community around your brand and generate loyal consumers to it.

You must worry about knowing in depth the needs, desires, and problems of your target audience or buyer persona, to offer them as a distinctive value what they are looking for.

When customers are the center of your business, it shows. Users perceive those businesses that are more friendly and focused on their experience, and that is why they choose them and contribute to making them grow.

“Personalization is essential to build a community around your brand and generate loyal consumers to it”

3 Examples of Companies with Competitive Advantage

Throughout this article, we have discovered what are the main characteristics of a Competitive Advantage and why it is beneficial to put it at the forefront of your business.

It seems like something very simple to point out, but it can be part of a very complex process to define what will be the detail that will make your company stand out from the rest.

If you still have doubts about what your Competitive Advantage may be, here we bring you some examples that will surely help you inspire.


Competitive Advantage: What is it and what benefits does it bring?

This electronic device company has been able to exploit its Competitive Advantage and adapt it over the years to remain not only one of the most profitable brands but also one of the most chosen by users.

As a strategy, it chose differentiation both in design and external appearance, as well as in technological innovation and the efficiency of the devices.

Apple managed to position the market in a very clear way, in the minds of users and the social imagination.

The brand became a sign of status, style, and exclusivity. In addition to solving problems, it offers an experience and gives access to belonging to a select group.

All these elements make it a leading company that stands out from all others.


Competitive Advantage: What is it and what benefits does it bring?

On the other hand, IKEA relies on cost leadership to position itself as a distinguished option against existing competition.

Its products are among the cheapest in the furniture market, thanks to the fact that it is the consumer who transports them and assembles them at home.

This also saves space and packaging, since disassembled furniture takes up less space.

Added to this is good planning and optimized work with suppliers, along with the strategic location of the stores. Being on the outskirts also reduces costs.


Competitive Advantage: What is it and what benefits does it bring?

This shoe company has managed to build its brand around a social competitive advantage.

The brand’s motto is “We are in business to improve lives”. This draws the attention of a good part of today’s public that seeks to generate a social impact in their environments.

We can say that it relies on segmentation as an advantage, targeting a sector of the audience that cares about its context and is interested in making conscious purchases.

The “One for One” campaign was about exactly this: for every product purchased, the company donated a pair of shoes to children in vulnerable situations.

Also, the brand offers a unique shopping experience. The customer not only feels helping someone when they buy, but the fact of visiting the stores also becomes a very special moment


Knowing what the Competitive Advantage of your business is is a decisive factor when it comes to proposing your brand strategies to position yourself against your competitors.

Find out what makes you special and work around it. Strengthen your strengths and you will see how they become a very special attraction for your clients.

Be it the cost, the characteristics of your product, or who it is aimed at, your brand has something that makes it different, something that you can take advantage of to be recognized in the midst of so many options.

“Knowing what the Competitive Advantage of your business is is a decisive factor when it comes to setting up your brand strategies to position yourself against your competitors.”

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