What is your company’s sustainable competitive advantage? A firm has a sustainable competitive advantage (SCA) when it is able to generate more customer value than competitive firms in its industry for the same set of products and service categories and when these other firms are unable to duplicate its effective strategy. A good SCA meets three criteria:
1. Customers care about what this SCA offers
2. The firm does it better than competitors, which generates a relative advantage
3. The SCA must be hard to duplicate or substitute, even with significant resources
If your customers don’t care about what your company is offering then the offer does not give your company an advantage. Your company also must prove that you are the best in what makes you stick out. This can be proven by reviews and keeping your word. You never want to over promise to your customers! Lastly, when your company has a sustainable competitive advantage then that means it should not be easy for a competitor to mimic what you are doing and steal your customers.
It is important to understand how your company stands out amongst the ones that are like it and what the value of your company is. Your value is mainly the three market-based sources of sustainable competitive advantage. Having a good brand, offerings, and relationships will be sure to give you the competitive advantage you need for people to choose your product or services over your competitor’s.
Having your brand be the market-based source of your sustainable competitive advantage can be challenging but is the most effective in larger consumer markets. It is about building your brand awareness and having a strong and unique meaning behind your brand that makes it harder to copy. Offerings are effective when there are new products and services your company can provide. This is an advantage because if the new products and services you provide can better suit the needs and wants of your customers over existing offerings, then customers will choose your company over your competitors. Relationships are most effective in B2B, service, and complex offering settings. Having a relationship competitive advantage is building trust and creating a bond that is hard to duplicate. People do business with people so when you have a strong relationship with who you’re trying to reach, then they are going to trust that you will provide them with the best product or service.