Consultants! Here’s How to Discover a Client’s Sustainable Competitive Advantage
A sustainable competitive advantage refers to a company’s assets, characteristics, and capabilities that are difficult to replicate by other companies and are sustainable.
If a firm wants to develop a sustainable competitive advantage, it should hire an experienced consultant who has worked on similar projects before. And if you’re a consultant, then this article will assist you in understanding how to help companies find a sustainable competitive advantage and ensure that they thrive in a highly competitive market that has cutthroat competition.
You will learn how to consider a company’s product, target audience, branding, and business model to find that core competitive advantage that is sustainable in the long term.
Re-Consider the Target Audience
The fact is, if a company is targeting the same audience as its competitor, the rivalry is going to be tough. And if both companies sell top-notch products that customers love, the competition will be reduced to just pricing—which is not a sustainable advantage.
For this reason, if a firm wants to develop a sustainable competitive advantage, it should target a different audience than its competitors instead of coming up with a different type of product for the same audience or lowering its price.
Let’s consider an example to understand this point better. Company A sells plant-based, dairy-free vegan protein powder to vegans. However, there are several other brands in the same niche serving the same audience. To gain a sustainable competitive advantage, Company A could target a different audience with the same product, for instance, lactose-intolerant individuals who cannot consume dairy products. Even though these individuals are not vegans and may consume meat, they could still benefit greatly from a dairy-free protein powder.
Think About Selling a Solution, Not a Product
Is a competitor's product solving the same problem as your client’s? Well, then, as a consultant, you may need to advise your client to choose to focus on another solution. When it comes to succeeding as a consultant, your creative thinking is as crucial as your analytical skills. So, be creative and brainstorm to find another solution to sell.
Once again, let’s consider a few examples to understand what a solution truly means. Working professionals don’t buy a car, they buy convenience that comes with not traveling in crowded trains and buses. Teenagers don’t buy new clothes, they buy a sense of confidence that comes with looking their best. Parents don’t buy toys, they buy happiness for their children.
To find a sustainable competitive advantage, a business should focus on the solution and develop a product around that solution—not the other way around.
Pick One Area in Which a Competitive Advantage Can Be Developed
This is another great way to beat the competition and continue doing so for the long term. If a firm wants to develop a sustainable competitive advantage, it should choose one area in which it can out-compete any other company in the industry. These areas include product, customer service, post-purchase experience, branding, pricing, and so on.
Find Out the Weaknesses and Strengthen What’s Weak
Succeeding as a consultant who’s helping a client find a competitive advantage will require you to not only examine the strengths, but also the weaknesses. The best way to do this is by conducting an in-depth SWOT analysis.
This will help a company understand the potential reasons why customers prefer competitors instead of them. Weaknesses should be studied as passionately as strengths because oftentimes, a lot of answers lie in weaknesses.
Let’s consider Amazon as an example again and compare it with Alibaba, another e-commerce giant. Even though Alibaba offers a large range of products on its website just like Amazon, customer experience on this website does match the levels of Amazon’s, and that is one of Alibaba’s biggest weaknesses. So, adding more products to the website than Amazon or offering cheaper products wouldn’t really help Alibaba out-compete Amazon until this weakness is fixed.
In conclusion, a sustainable competitive advantage can be gained by targeting a different audience than competitors, focusing on selling a unique solution, or excelling in a particular area where the competitor is potentially weak. Sometimes, the same product, if targeted towards a different audience, can work wonders with adjustments in marketing communications.
Also, companies can search for gaps in the market and offer solutions to problems that no other business is offering. To do this, products and services should be designed keeping the solution in mind.
And finally, a company could gain a competitive advantage by excelling in one area, such as customer experience or product quality, and be so good at it that others simply can’t reach that level.
On another note, as a consultant, you should also address any weaknesses that could fade the effect of competitive advantage, no matter how promising or sustainable that advantage is. All the aforementioned advantages could be worthless if there are major weaknesses that are putting customers off and driving them to competitors.