How To Achieve Competitive Advantage In Your Business

A competitive advantage is an attribute that allows a business to outperform its competitors. It is simply a factor that distinguishes your business from others and makes customers more likely to choose your product over the competition. This allows a business to achieve superior margins compared to its competition and generates value for the company.

A competitive advantage must be difficult, if not impossible, to duplicate. If it is something that can easily be copied, it is not considered a competitive advantage.

There are two (2) main strategies for sustaining a competitive advantage over rival businesses and their products or services. These strategies are:


This means being the lowest-cost producer in the market. The lowest-cost producer is able to compete effectively on price, by offering its products at a lower price than rival products. He is able to sell his products more cheaply than his competitors and still make profit.

Businesses that operate this strategy have excellent systems of cost control and continually plan for further cost reductions.

It’s difficult for new start-ups or small businesses to adopt this strategy. Large businesses are easily able to adopt this strategy because they can benefit from economies of scale that smaller businesses are unable to achieve.

This means that large businesses are able to produce in larger quantities, thereby spreading their fixed costs over a large output, which in turn leads to a lower cost than what small businesses incur.


This means making a product different from your competitor’s product such that customers are ready and willing to pay a higher price for your product, because they value its different features.

This strategy has to do with the concept of Unique Selling Point (USP). What’s that thing your product offer, which gains an advantage over your competitor’s product? What extra thing can you offer that will make customers to willingly pay a higher price for your product/service?

Businesses pursuing this strategy need to offer products and services that are perceived as better or more suitable than those of your competitors. To deliver these products and services usually require investment and innovation.


Since it’s difficult for most small businesses to adopt the cost leadership strategy, then it’s better to go for the second strategy to gain a competitive advantage. This doesn’t mean you should ignore cost. Try as much as possible to control and reduce your costs, so that you can offer more value.

Even when faced with stiff competition, having a competitive advantage provides you with greater opportunities to gain more market share. More importantly, the stronger your competitive advantage, the greater your ability to sustain a position of strength in the market no matter its conditions or level of competition.

Leave a Reply

Your email address will not be published. Required fields are marked *