Competitive advantage of firms on a global scale. Protecting Competitive Advantages

Business strategies win when they are based on sustainable competitive advantage. M. Porter believes that a company's position in the industry is determined by competitive advantage. Ultimately, a firm outperforms its rivals if it has a strong competitive advantage—that is, if its customer experience is superior to that of its competitors and it is able to counteract the influence of competitive forces. Competitive advantage is achieved when a company offers the buyer a product of such value that he is unlikely to find anywhere else. By creating an advantage, the company sets higher prices for its goods and earns high profits. Competitive advantage can be economic, psychological or economic-psychological. Economic advantage is especially important in business markets in which buyers are driven by the desire to increase their own company's profitability.

Competitive advantage comes not from those who have unlimited resources, but from those who think constructively. A high rate of return on investment is not always a condition for long-term growth of a company.

The company's competitive advantage lies in the fastest provision of customers with new information services and products that will shape the markets of the future. There are many ways to achieve a competitive advantage: produce high-quality products, provide excellent customer service, offer lower prices than competitors, have a better geographical location, have your own technology, develop and introduce a new product in a shorter time, have a well-known trade brand and reputation, providing customers with additional value for their money (combining good quality, good service and reasonable prices). At the same time, in order to succeed in creating a competitive advantage, a company must offer customers what they consider most acceptable to them - a good product at a low price or a product of improved quality, but more expensive.

All types of competitive advantages of an enterprise from the point of view of ways to achieve certain competitive positions can be divided into two groups:

1) low order advantages;

2)high order advantages.

Low-order advantages are associated with the possibility of using cheap: labor; materials (raw materials); energy. The low order of competitive advantages is due to the fact that they are very unstable and can easily be lost either due to rising prices and wages, or due to the fact that these cheap production resources can also be used (or outbid) by your competitors. In other words, low-order advantages are advantages with low sustainability, unable to provide advantages over competitors for a long time.

High-order advantages usually include: unique products; unique technology and specialists; good reputation of the company. If a competitive advantage is achieved through the release of unique products to the market based on their own design developments, then in order to destroy such an advantage, competitors must either develop similar products, or come up with something better, or get these secrets at the lowest cost. All these ways require a lot of cost, effort and time from the competitor. This means that for some time the company finds itself in a leading and unattainable position, that is, it is sustainably competitive.

A company's competitive advantage is determined by how clearly it can organize relationships with suppliers and consumers. By better organizing these connections, a company can gain a competitive advantage (Fig. 2). Regular and timely deliveries can reduce a firm's operating costs and reduce inventory levels required.

Fig.2

The value chain of a company is a system of its activities, between which there are connections. These relationships arise when the method of one activity affects the cost or efficiency of others (Figure 3).

Rice. 3

Connections often lead to the fact that additional costs for selecting individual activities to each other pay off in the future. For example, more expensive designs and components or greater quality control can reduce after-sales service costs. Firms must incur such costs as part of their strategy for the sake of competitive advantage.

The most typical reasons for innovations that give competitive advantages to a company are:

1) New technologies. Changes in technology can create new opportunities for new product development, new ways of marketing, manufacturing or delivery, and improvements in related services. It is this that most often precedes strategically important innovations. New industries emerge when a change in technology makes a new product possible. Changes in leadership are most likely to occur in industries where dramatic changes in technology render the knowledge and assets of previous industry leaders obsolete.

2) New or changed customer requests. Often, competitive advantage arises or changes hands when customers have completely new needs. Those firms that are already established in the market may not notice this or may not be able to respond properly because responding to these demands requires creating a new value chain.

3) The emergence of a new industry segment. Here there is an opportunity not only to reach a new group of indicators, but also to find a new, more efficient way to produce certain types of products or to form new approaches to a certain group of customers.

4) Changes in the cost of production components. Competitive advantage often changes hands due to changes in the absolute or relative costs of components such as labor, raw materials, energy, transportation, communications, media, or equipment. This indicates a change in conditions with suppliers or the possibility of using new or different components. A firm achieves competitive advantage by adapting to new conditions, while competitors are tied hand and foot by investments and tactics adapted to old conditions.

5)Changes in government regulations. Policy changes in areas such as standards, environmental protection, new industry requirements, and trade restrictions are other common incentives for innovation that lead to competitive advantage. Existing market leaders have adapted to certain regulations from the government, and when they suddenly change, businesses may not be able to adequately respond to these changes.

A company's competitive strategy includes the business approaches and initiatives it uses to attract customers, compete, and strengthen its position in the marketplace. The goal is quite simple: to conduct your business ethically and fairly with your competitors, to achieve a competitive advantage in the market and to create your clientele: a circle of loyal customers. A company's competitive strategy usually involves both offensive and defensive actions taken depending on changes in the market situation. In addition, a competitive strategy provides for short-term tactical moves for an immediate reaction to the situation and long-term actions on which the future competitive capabilities of the company and its position in the market depend.

Competitive strategy is narrower in scope than business strategy. Business strategy not only addresses the issue of how to compete, but also reflects management's functional strategies, actions and plans for operating in a variety of industry conditions, as well as how managers solve strategic problems. Competitive strategy is concerned solely with management's plans to compete and provide additional value to customers.

There are five options for approaching a company's competitive strategy:

1) Cost leadership strategy provides for a reduction in the total cost of production of a product or service, which attracts a large number of buyers.

2) Broad differentiation strategy is aimed at giving the company's products specific features that distinguish them from the products of competing companies, which helps attract more customers.

3) Optimal cost strategy enables customers to get more value for their money through a combination of low costs and broad product differentiation. The challenge is to ensure optimal costs and prices relative to manufacturers of products with similar features and quality.

4) Focused strategy, or market niche strategy based on low costs , is aimed at a narrow segment of buyers, where the company is ahead of its competitors due to lower production costs.

5) Formulated strategy, or market niche strategy, based on product differentiation, aims to provide representatives of the selected segment with goods or services that best meet their tastes and requirements.

Rice. 4

Choosing one of five competitive strategies—cost leadership, broad differentiation, value-added cost, focused low-cost, or focused differentiation—should create a competitive advantage. The company's competitive advantage and position in the market must be protected from copying by competitors and be attractive to buyers.

The strategy for achieving cost leadership is justified in the following cases:

the products produced in the industry differ little from each other (differences in brand names are insignificant);

most buyers are price sensitive and buy the cheapest products;

there are very few ways to achieve product differentiation that will satisfy customers;

most buyers use the product in the same way, so the requirements for it from buyers do not differ;

the buyer's costs of switching from one seller, that is, one brand to another, are low or equal to zero;

There are many buyers and they have significant power influencing the price level.

To gain a cost advantage, a company must be more adept than competitors at controlling cost structure and flow, or find ways to reduce costs throughout the value chain. Success accompanies those companies whose competitive advantage is based on the constant search for ways to save money along the entire value chain. They are very adept at finding ways to reduce the costs of their business.

Differentiation strategies create competitive advantage by introducing additional attributes and characteristics into a company's products that competitors do not have. What a firm can do to create customer value is the basis of differentiation. Success of differentiation consists in the company’s ability to reduce buyer costs for using products, more fully meet buyer requirements, or increase buyer moral satisfaction from the company’s products. Sustainable differentiation is usually based on a company's unique internal skills and prowess that competitors cannot easily access.

A cost-benefit strategy combines strategic efforts to reduce costs with strategic efforts to make minor improvements in product quality, service, performance, or appearance. The goal of the strategy is to provide the recipient with more value for their money; in other words, getting closer to competitors in the main points that determine the parameters “quality - service - characteristics - appearance”, and defeating them in terms of costs for making all the necessary changes to the product. The success of a cost-optimal strategy comes when a company has unique expertise in creating a better product or service at a lower cost than its competitors. The main advantage of the company in this case is the ability to simultaneously reduce the cost per unit of production and make appropriate changes to the product or service.

The competitive advantage of focus is associated both with achieving low costs in serving a target market niche and with developing the ability to offer niche buyers a product that is different from competitors' products. In other words, focus can be based on cost, or it can be based on differentiation. This strategy works well when:

customer requirements for a specific product are different;

there are no other competitors trying to specialize in this segment;

the company does not have the opportunity to operate in a wider segment or the market as a whole;

Customer segments vary widely in size, growth rates, profitability, and the influence of the five forces of competition that make some segments more attractive than others.

There is a wide variety of offensive actions that can maintain a competitive advantage. These actions can be aimed at the strengths or weaknesses of competitors, they can contribute to the seizure of unoccupied space or a large-scale offensive on many fronts, be in the nature of guerrilla warfare or pre-emptive strikes. The target of an attack can be leaders, companies following the leader, small or weak companies in the industry.

Strategic approaches to defending a company’s position may be as follows:

attempts being made to strengthen the company’s existing position;

constant development and updating of products, which helps to avoid obsolescence of products;

forcing competitors to abandon even attempts to launch offensive actions.

Managers must understand that the set of strategic options is delineated and limited:

firstly, the nature of the industry and the conditions of competition in it;

secondly, the competitiveness of the company itself, its market position and capabilities.

Thus, the competitive advantages of an enterprise are real or potential competencies and abilities, characteristics of its production, financial, marketing and other activities that allow the enterprise, in a competitive environment, to realize its economic interests with a greater degree of efficiency than its competitors. All types of competitive advantages of an enterprise from the point of view of ways to achieve certain competitive positions can be divided into two groups: low-order advantages and high-order advantages. The company's competitive advantage and position in the market must be protected from copying by competitors and be attractive to buyers.

To create and maintain competitive advantages, as well as strengthen competitive positions in the market, any company must have an appropriate strategy. There are five options for approaching a company's competitive strategy: cost leadership strategy; broad differentiation strategy; optimal cost strategy; focused or market niche strategy based on low costs; a formulated or market niche strategy based on product differentiation.

The problem of analyzing the competitiveness of an enterprise is complex and complex, since competitiveness consists of many different factors. However, this analysis is necessary for the enterprise to carry out a number of activities, such as: developing the main directions for the creation and manufacture of products that are in demand; assessing the prospects for selling specific types of products and forming a product range; setting prices for products and so on. The complexity of the category of competitiveness is determined by the variety of approaches and methods to its analysis.

Honestly, competitive advantages- This is a topic to which I have an ambivalent attitude. On the one hand, rebuilding a company from competitors in the market is a very interesting task. Especially when the company, at first glance, is like everyone else and does not stand out in anything special. On this issue I have a principled position. I am convinced that any business can be rebuilt, even if it is one of a thousand and trades at prices above the market average.

Types of competitive advantages

Conventionally, all competitive advantages of any organization can be divided into two large groups.

1. Natural (price, terms, delivery conditions, authority, clients, etc.)
2. Artificial (personal approach, guarantees, promotions, etc.)

Natural benefits carry more weight because they represent factual information. Artificial advantages are more of a manipulation, which, if used correctly, can greatly strengthen the first group. We will return to both groups below.

Now comes the fun part. Even if a company considers itself to be the same as everyone else, is inferior to competitors in terms of prices and believes that it does not stand out in any way, it still has natural advantages, plus, it can be made artificial. You just need to spend a little time finding them and formulating them correctly. And this is where it all starts with competitive analysis.

Competitive analysis that doesn't exist

Do you know what is the most amazing thing about Runet? 80-90% of businesses do not conduct competitive analysis and do not highlight the company’s advantages based on its results. That’s all, but what you have enough time and energy in most cases to do is look at your competitors and tear off some elements from them. That's the whole setup. And it is here that clichés grow by leaps and bounds. Who do you think was the first to coin the phrase “Young and dynamically developing company”? It doesn't matter. Many took it and... Quietly adopted it. On the quiet. In the same way, clichés appeared:

• Individual approach
• Highly qualified professionalism
• High quality
• First class service
• Competitive prices

And many others, which in fact are not competitive advantages. If only because no company in its right mind would say that its employees are amateurs, and the quality is a little worse than none.

I am generally surprised by the attitude of some businessmen. If you talk to them, everything “somehow” works for them, orders “somehow” go through, there is a profit - and okay. Why invent, describe and count something? But as soon as things start to get tough, that’s when everyone remembers marketing, differentiation from competitors, and the company’s advantages. It is noteworthy that no one is counting the money that was lost due to such a frivolous approach. But this is also profit. Could be...

In 80-90% of cases, Runet businesses do not conduct competitive analysis and do not show the company’s advantages to their clients.

However, there is a positive side to all this. When no one shows their advantages, it’s easier to rebuild. This means it’s easier to attract new customers who are searching and comparing.

Competitive advantages of products (products)

There is another serious mistake that many businesses make when formulating benefits. But here it is worth mentioning right away that this does not apply to monopolists. The essence of the mistake is that the client is shown the advantages of the product or service, but not the company. In practice it looks like this.

That is why it is very important to correctly place emphasis and bring to the fore the benefits and emotions that a person receives and experiences when working with the organization, and not from purchasing the product itself. I repeat, this does not apply to monopolists who produce a product that is inextricably linked with them.

Main competitive advantages: natural and artificial

It's time to return to the varieties of benefits. As I already said, they can be divided into two large groups. Here they are.

Group No. 1: natural (actual) benefits

Representatives of this group exist on their own, as a fact. Only many people don’t write about them. Some think it’s obvious, others because they hide behind corporate clichés. The group includes:

Price- one of the strongest competitive advantages (especially when there are no others). If your prices are lower than those of your competitors, write how much. Those. not “low prices”, but “prices 20% below market prices”. Or “Wholesale prices to retail”. Numbers play a key role, especially when you work in the corporate segment (B2B).

Timing (time). If you are delivering goods from today to today, say so. If you deliver to remote regions of the country in 2-3 days, tell us about it. Very often the issue of delivery times is very acute, and if you have thoroughly worked out logistics, then write specifically where and for how much you can deliver the goods. Again, avoid abstract clichés like “fast/prompt delivery.”

Experience. If your employees are keen on what you sell and know all the ins and outs of your business, write about it. Buyers love working with professionals they can consult with. In addition, when purchasing a product or service from an experienced seller, customers feel more secure, which brings them closer to purchasing from you.

Special conditions. If you have any special delivery conditions (deferred payment, postpayment, discounts, presence of a showroom, geographic location, wide warehouse program or assortment, etc.). Anything that competitors don’t have will do.

Authority. Certificates, diplomas, diplomas, major clients or suppliers, participation in exhibitions and other evidence that increase the significance of your company. The status of a recognized expert is a great help. This is when company employees speak at conferences, have a well-promoted YouTube channel, or give interviews in specialized media.

Narrow specialization. Imagine that you have a Mercedes car. And in front of you are two workshops: a specialized service that deals only with Mercs, and a multidisciplinary one that repairs everything from UAZs to tractors. Which service will you contact? I bet the first one, even if it has higher prices. This is one of the types of unique selling proposition (USP) - see below.

Other actual benefits. For example, you may have a wider range of products than your competitors. Or a special technology that others do not have (or that everyone has, but which competitors do not write about). Anything can happen here. The main thing is that you have something that others don’t have. As a fact. This also constitutes your USP.

Group No. 2: artificial advantages

I especially love this group because it helps a lot in situations where the customer’s company does not have any advantages as such. This is especially true in the following cases:

1. A young company, just entering the market, has no clients, no cases, no reviews. As an option, specialists leave a larger company and organize their own.
2. The company occupies a niche somewhere in the middle: it does not have a wide range, like large retail chains, and does not have a narrow specialization. Those. sells goods, like everyone else, at prices slightly above the market average.
3. The company has some adjustments, but it is the same as its competitors. Those. everyone in the niche uses the same actual advantages: discounts, experience, etc.

In all three cases, introducing artificial advantages helps. These include:

Added value. For example, you sell laptops. But you can't compete on price with a larger seller. Then you use a trick: install an operating system and a basic set of programs on your laptop, selling it a little more. In other words, you create added value. This also includes various promotions a la “Buy and Win...”, “When buying an apartment - a T-shirt as a gift”, etc.

Personal adjustment. It works great when everyone around is hiding behind corporate clichés. Its essence is that you show the face of the company (for example, the director) and involve. It works great in almost any niche: from selling children's toys to armored doors.

Responsibility. A very strong advantage that I actively use on my laboratory’s website. Combines perfectly with the previous point. People love to work with people who are not afraid to take responsibility for the products and/or services they sell.

Reviews. Provided they are real. The more authoritative the person who gives you feedback, the stronger the impact on the audience (see trigger “”). Reviews on letterhead with a stamp and signature work better.

Demonstration. The best presentation is a demonstration. Let's say you have no other advantages. Or there are, but implicit. Make a clear presentation of what you are selling. If these are services, show how you provide them, make a video. At the same time, it is important to place the accents correctly. For example, if you check each product for functionality, tell us about it. And this will be an advantage for your company.

Cases. This is a kind of visual demonstration of solved problems (completed projects). I always recommend describing them because they work great for sales. But there are situations when there are no cases. This is especially true for young companies. Then you can make so-called artificial cases. The idea is simple: do yourself or a hypothetical client a favor. As an option - to a real client on a mutual basis (depending on the type of service, if possible). This way you will have a case that you can show and demonstrate your expertise.

Unique selling proposition. We have already talked about it a little higher. Its essence is that you enter some detail or disclose information that sets you apart from your competitors. Take me, for example. I provide copywriting services. But many specialists provide a wide range of copywriting services. And my USP is that I guarantee results expressed in numbers. Those. I work with numbers as an objective indicator of performance. And it's catchy. You can find out more about the USP in.

How to find and correctly describe the company's advantages

As I already said, I firmly believe that every company has its own advantages (and disadvantages, but that doesn’t matter now :)). Even if she is a strong middle peasant and sells everything like everyone else. And even if it seems to you that your company does not stand out in any way, the easiest way to understand the situation is to ask directly the clients who are already working with you. Be prepared that the answers may surprise you.

The easiest way to find out the strengths of your company is to ask your clients why they chose you.

Someone will say that they work with you because you are closer (geographically). Some will say that you inspire confidence, while others simply liked you. Collect and analyze this information and it will increase your profits.

But that is not all. Take a piece of paper and write down the strengths and weaknesses of your company. Objectively. Like in spirit. In other words, what you have and what you don’t have (or don’t have yet). At the same time, try to avoid abstractions, replacing them with specifics. Check out the examples.

Not all advantages can and should be written about on the same website. However, at this stage the task is to write down as many strengths and weaknesses of the enterprise as possible. This is an important starting point.

Take a pen and paper. Divide the sheet into two columns and write down the advantages of the company in one and the disadvantages of the company in the second. Maybe with a cup of coffee. Don’t look at the rowan tree, it’s just there for the ambiance.

Yes, we have, but this

Look at the examples:

You get the idea. This gives you several types of competitive advantages:

1. Natural (factual information that you have that sets you apart from your competitors)
2. Artificial (amplifiers that also set you apart from competitors - guarantees, personal approach, etc.)
3. “Shifters” are disadvantages that are turned into advantages. They complement the first two points.

Little trick

I use this trick from time to time, when it is not possible to fully show off my strengths, as well as in a number of other cases when I need something more “weighty”. Then I don’t just write the company’s advantages, but combine them with the benefits that the client receives from the product or service. It turns out to be a kind of “explosive mixture”.

See what this looks like in practice.

• Was: Experience 10 years
• Became: Budget savings of up to 80% due to 10 years of experience

Or another example.

• Was: Low prices
• Became: The price is 15% lower, plus a reduction in transport costs by 10% due to our own fleet of vehicles.

You can learn in detail about how to correctly form benefits from.

Summary

Today we looked at the types of main competitive advantages of a company and, using examples, we looked at how to formulate them correctly. At the same time, it is important to understand that everything that we did today should by default be part of the competitive strategy (if it is being developed). In other words, everything will work better when linked into a single system.

I really hope that the information in this article will expand your capabilities and allow you to conduct competitive analysis more effectively. In turn, if you have any questions, ask them in the comments.

I'm sure you will succeed!

(UKP) is a time-stable value, a significance created by a company for its consumers, within the framework of a single market strategy based on a special combination of resources and capabilities, which cannot be repeated by competitors for a long time.

The term sustainable competitive advantage comes from the English "sustainable competitive advantage" (SCA).

Sustainable competitive advantage- is the result of a rational combination of exceptional resources and capabilities that are valuable to consumers, which are extremely limited and difficult to reproduce. The point is not so much in the abilities and resources themselves, but in the uniqueness and stability of their combinations. Firms using such combinations focus on collective learning and coordinating the efforts of all employees to build specific collective competencies.

Durability of Competitive Advantage depends on the rate at which the resources and capabilities on which it is based depreciate or become obsolete.

The goal of sustainable competitive advantage– give the owner a market advantage among competitors, and often primacy in the market. Sustainable competitive advantage enables a business to maintain and improve its competitive position in the market and survive in the fight against competitors.

Classification of competitive advantages. There is a fairly clear classification of a company’s competitive advantages. The basis of this classification is M. Porter’s theory of competitive advantage.

Types of competitive advantages:

• cost leadership (low costs);
• differentiation;
• focusing

The first two types can be considered in broad or narrow formats, resulting in the third type of viable competitive strategy.

Criteria for unique competitive advantage:

In the most general sense, sustainable competitive advantage satisfies four criteria:

• they provide benefits to consumers;
• they are unique and cannot be repeated by competitors;
• they are stable over time

Sources of competitive advantage:

• creating a unique selling proposition (USP, unique selling proposition - USP);
• creating innovations;
• effective leadership;

From a strategic perspective, sustainable competitive advantage depends on the firm's ability to mobilize political and cultural support for the use of valuable resources. In economic theory, there are three concepts that cover the main sources of formation of a firm’s competitive advantage in the modern economy: institutional, market And resource.

Within the framework of the institutional approach The source of competitive advantage is the integration of the company into its surrounding business environment, its information field and the system of industry and market relations.

Market concept is based on the fact that the success of a company in competition depends on the specifics of the industry, the type and scale of competition, as well as. on the behavior of the company itself in the market.

Resource approach is based on the assertion that the market position of a company is based on the unique combination of its tangible and intangible resources and their management, therefore, a unique combination of original and difficult to copy specific types of resources acts as a source of competitive advantage.

The idea of ​​a sustainable unique competitive advantage was promulgated in 1984 when J. Day proposed the types of strategies that would help make competitive advantage sustainable. The term SCA (sustainable competitive advantage) appeared in 1985, when M. Porter defined the main types of competitive strategies of firms: low costs and differentiation, allowing to achieve sustainable competitive advantage.

The clearest formulation of the concept of SCA (SCA) was presented in 1991 by Barney: “A firm can be said to have a sustainable competitive advantage if it implements a strategy for creating value and advantages that cannot be immediately implemented by any existing or potential competitor, the fact that these other competitors are not able to copy, compensate for the benefits obtained from this strategy."

Sustainable competitive advantage is not limited to firms, but also for regions and states.

Unlike the competitiveness of a product, the competitiveness of an organization cannot be achieved in a short period of time. The competitiveness of an organization has a cumulative effect and is achieved through long-term and flawless work in the market.

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For an enterprise to operate successfully in the market, it needs to have an advantage over organizations that produce similar products or provide similar services. Competitive advantage is a concentrated manifestation of superiority over competitors in various areas of a particular organization, measured by economic as well as financial indicators. It should not be understood as a potential enterprise opportunity. This is not a possibility, but a fact that occurs as a result of the real preferences of a certain circle of buyers. In business, competitive advantage is one of the main, main goals and result of the economic activity of the enterprise. To achieve this goal, the efforts of the entire team of the organization are necessary.

A competitive advantage can appear if your enterprise has a low cost of goods or services, a high level of product differentiation, optimal innovation, and a fairly quick response to market needs. This includes labor productivity and personnel qualifications, high professionalism of managers, and a high level of strategic management.

Competitive advantage is comparative in nature because it can only be identified by influencing sales performance.

The number of preferred choices on the part of respondents can serve as a reflection of the product rating, which is the result of marketing analysis.

In a special position are products that have unique characteristics that have no analogues. Such products, having absolute competitive advantages, also have (in addition to unique value) the fact that they overcome the boundaries of competition for some time and are monopolists in the market. But this type of monopoly, supported by the state, is consolidated by the method of patenting new product characteristics. These absolute advantages will create an additional incentive for scientific and technological development, which will help competition develop.

The competitive advantage of any economic entity cannot be universal; it can only be relative.

To achieve it, a whole range of measures is required, however, they may not be sufficient, since external factors may be stronger.

Porter's theory of competitive advantage is devoted to the analysis of the influence of various factors on the organization. In his work “International Competition” (1990), he came to the following conclusion: the global competitive advantages of national enterprises depend most of all on the macroeconomic and social environment in which they operate in the country. The macroenvironment is determined not only by production factors, but also by factors such as demand in the domestic market; development of related industries; level of management in the country; level of competition; government economic policy; random events (war, unexpected discoveries, etc.). The presence of these six factors largely determines the competitive advantages of organizations, industries and countries in the global market.

The world does not stand still, information is constantly updated, and market participants are in search of marketing ideas, ways of doing business, and new views on their product. Any business is tested for strength by its competitors, so when developing a development strategy, it is wise to take into account their influence, market share, positions and behavior.

What is competitive advantage

Competitive advantage is a certain superiority of a company or product over other market participants, which is used to strengthen its position when reaching the planned level of profit. Competitive advantage is achieved by providing the client with more services, higher quality products, relative cheapness of goods and other qualities.

A competitive advantage for a business provides:

– prospects for long-term growth;

– stability of work;

– obtaining a higher rate of profit from the sale of goods;

– creating barriers for new players when entering the market.

Let us note that competitive advantages can always be found for any type of business. To do this, you should conduct a competent analysis of your product and the competitor’s product.

What types of competitive advantages are there?

What allows you to create competitive advantages for a business? There are 2 options for this. First of all, the product itself can provide competitive advantages. One type of competitive advantage is the price of a product. Buyers often prefer to buy a product only because it is cheap relative to other offers with similar properties. Due to its low cost, a product can be purchased even if it does not provide much consumer value to buyers.

The second competitive advantage is differentiation. For example, when a product has distinctive features that make the product more attractive to the consumer. In particular, differentiation can be achieved through characteristics that are not related to consumer properties. For example, due to the trademark.

If a company creates a competitive advantage for its product, it can uniquely differentiate its position in the market. This can be achieved by monopolizing part of the market. True, such a situation contradicts market relations, since the buyer is deprived of the opportunity to choose. However, in practice, many companies not only provide themselves with such a competitive advantage of the product, but also maintain it for quite a long time.

4 criteria for assessing competitive advantages

Utility. The proposed competitive advantage should be beneficial to the company's operations and should also enhance profitability and strategy development.

Uniqueness. A competitive advantage should differentiate a product from its competitors, not replicate them.

Security. It is important to legally protect your competitive advantage and make it as difficult as possible to copy it.

Value for the target audience of the business.

Strategies for Competitive Advantage

1. Cost leadership. Thanks to this strategy, the company receives income above the industry average due to the low cost of its production, despite high competition. When a company receives a higher rate of profit, it can reinvest these funds to support the product, inform about it, or beat competitors due to lower prices. Low costs provide protection from competitors, since income is preserved in conditions that are not available to other market participants. Where can you use a cost leadership strategy? This strategy is used when there are economies of scale or when there is a prospect of achieving lower costs in the long term. This strategy is chosen by companies that cannot compete in the industry at the product level and work with a differentiation approach, providing distinctive characteristics for the product. This strategy will be effective when there is a high proportion of consumers who are price sensitive.

• Information about competitors: 3 rules for its collection and use

This strategy often requires unification and simplification of the product to facilitate production processes and increase production volumes. It may also require a high level of initial investment in equipment and technology to reduce costs. For this strategy to be effective, careful control of labor processes, product design and development, with a clear organizational structure is required.

Cost leadership can be achieved through certain opportunities:

– limited access of the enterprise to obtaining cheap resources;

– the company has the opportunity to reduce production costs due to accumulated experience;

– management of the company’s production capacity is based on the principle that promotes economies of scale;

– the company provides for scrupulous management of its inventory levels;

– strict control of overhead and production costs, abandoning small operations;

– availability of technology for the cheapest production in the industry;

– standardized production of the company;

2 steps to building a competitive advantage

Alexander Maryenko, project manager of the A Dan Dzo group of companies, Moscow

There are no clear instructions for creating a competitive advantage, taking into account the individuality of each market. However, in such a situation, you can be guided by a certain logical algorithm:

Determine the target audience that will buy your product or influence this decision.

Determine the real need of such people related to your services or products, which is not yet satisfied by suppliers.

2. Differentiation. When working with this strategy, the company provides unique properties for its product that are important to the target audience. Consequently, they allow you to set a higher price for the product compared to competitors.

A product leadership strategy requires:

– the product must have unique properties;

– the opportunity to create a reputation for high quality product;

– highly qualified employees;

– the ability to protect competitive advantage.

The advantage is the ability to sell the product at higher prices than the industry average, avoiding direct competition. Thanks to this strategy, it is possible to achieve better commitment and loyalty to the brand, under the conditions of competent construction of the assortment and the presence of competitive advantages.

Risks or disadvantages of using a differentiated marketing strategy:

– a significant difference in prices is possible, due to which even the unique qualities of the product will not attract a sufficient number of buyers;

– a product may lose its uniqueness when its advantages are copied by cheaper products.

This strategy is used for saturated markets by companies that are ready to make high investments in promotion. There is no need to talk about low cost - it will be higher than the market average. However, this is offset by the ability to sell the product at higher prices.

3. Niche leadership or focus. The strategy involves protection from major competitors and substitute products. In this case, it is possible to achieve a high rate of profit by more effectively meeting the needs of a narrow audience of consumers. This strategy can be based on any type of competitive advantage - the breadth of the offered range or the lower price of the product.

In this case, the company is limited in market share, but it does not need significant investments to develop the product, which is a chance for the survival of small enterprises.

Risks and disadvantages of using a focusing strategy:

– there is a high probability of large differences in product prices compared to leading brands on the market, which can scare away its target audience;

– the attention of large market participants switches to niche segments in which the company operates;

– a serious danger of reducing the difference between the needs of the industry and the niche market.

Where to Use a Niche Leadership Strategy? Working with this strategy is recommended for small companies. It is most effective when the market is saturated, there are strong players, when costs are high or when costs are uncompetitive in comparison with market leaders.

Three stages of service strategy

Stage I. Innovation. When one of the market participants introduces something new in terms of customer service. The company stands out during this period, given the presence of a new competitive advantage.

Stage II. Addiction. The proposed service is becoming familiar to consumers, and an analogue is gradually being introduced in the activities of competitors.

Stage III. Requirement. For consumers, this offer becomes an integral element of a service or product, becoming a standard.

How to check the level of service in your company

• Conducting informal surveys. The CEO and other managers need to understand consumers’ opinions about the proposed service.
• Conducting formal surveys (focus groups). It would be rational to involve both consumers and representatives of all departments of your company for these events.
• Hire outside consultants to survey company employees. With external consultants, the value of the answers increases (with more candid answers).

How to improve the service

Tatiana Grigorenko, managing partner of 4B Solutions, Moscow

Let's look at general tips for improving service in companies.

1. Surprise, influence emotions. Typically, visitors to the office are offered packaged tea or instant coffee. We decided to pleasantly surprise our customers - the visitor is offered a choice of 6 types of professionally prepared coffee, 6 excellent varieties of tea with signature chocolate for dessert.

2. Break the rules. In today's market, it is ineffective to be like everyone else; you need to be better than the rest.

3. Listen to your customers. Do you need to ask your clients what would be of interest to them?

How to create a competitive advantage

When developing a competitive advantage, there are nine criteria for a successful option to consider:

1) Uniqueness.

2) Long-term. Competitive advantage must be of interest for at least three years.

3) Uniqueness.

4) Credibility.

5) Attractiveness.

6) Have ReasonstoBelieve (reason for trust). Specific reasons that will make buyers believe.

7) Be better. Buyers must understand why this product is better than others.

8) Have the opposite. There needs to be a complete opposite in the market. Otherwise it will not be a competitive advantage.

9) Brevity. Must fit into a 30 second sentence.

Step #1. We make a list of all the benefits

Product benefits are sought as follows:

– we ask buyers what competitive advantages they hope to gain from your product;

– make a detailed list of all the properties that the product has, based on the characteristics from the “marketing mix” model:

1) Product

What can you say about the product:

– functionality;

– brand symbols: logo, name, corporate identity;

– appearance: packaging, design;

– required product quality: from the position of the target market;

– service and support;

– assortment, variability.

2) Price

What can you say about the price:

– pricing strategy for entering the market;

– retail price: the selling price of a product must necessarily correlate with the desired retail price, only if the company does not become the last link in the overall distribution chain.

– pricing for different sales channels; different prices are assumed, depending on a specific link in the distribution chain, a specific supplier;

– package pricing: with the simultaneous sale of several company products at special prices;

– policy regarding promotional events;

– availability of seasonal promotions or discounts;

– possibility of price discrimination.

3) Place of sale

It is necessary to have the product on the market in the right place so that the buyer can see it and purchase it at the right time.

What can you say about the sales meta:

– sales markets, or in which the sale of goods is planned;

– distribution channels for selling goods;

– type and conditions of distribution;

– conditions and rules for displaying goods;

– issues of logistics and inventory management.

4) Promotion

Promotion in this case involves all marketing communications to attract the attention of the target audience to the product, with the formation of knowledge about the product and key properties, the formation of the need to purchase the product and repeat purchases.

What can you say about promotion:

– promotion strategy: pull or push. The Push strategy involves pushing goods through the trade chain by stimulating intermediaries and sales personnel. Pull – “pulling” products through the distribution chain by stimulating consumers, the final demand of their product;

– target values ​​of knowledge, brand loyalty and consumption among its target audience;

– required marketing budget, SOV in the segment;

– geography of your communication;

– communication channels for contact with consumers;

– participation in specialized shows and events;

– media strategy of your brand;

– PR strategy;

– promotions for the coming year, events aimed at stimulating sales.

5) People

– employees who represent your product and company;

– sales personnel in contact with target consumers of the product;

– consumers who are “opinion leaders” in their category;

– manufacturers on whom the quality and price of the product may depend;

– privileged consumer groups also belong to this group, including VIP clients and loyal customers who generate sales for the company.

What can you say about working with people:

– programs to create motivation, with the development of relevant competencies and skills among employees;

– methods of working with people on whom the opinion of the consumer audience depends;

– education and loyalty programs for its sales staff;

– methods for collecting feedback.

6) Process

This one applies to the services market and the B2B market. “Process” refers to the interaction between the company and consumers. It is this interaction that constitutes the basis for purchasing on the market with the formation of consumer loyalty.

• Unique selling proposition: examples, development tips

You can talk about programs to improve the process of providing services to your target clients. The goal is to provide the most comfortable conditions for customers when purchasing and using the proposed service.

7) Physical environment

This also applies to the service and B2B market. This term describes what surrounds the buyer during the purchase of a service.

Step #2: Rank all the benefits

To evaluate the list, a three-point scale of the importance of characteristics is best suited:

1 point - the benefit of this characteristic for target consumers is not valuable;

2 points - the benefit is not primary, which stimulates the purchase of the product in the first place;

3 points - the benefit received is one of the most significant properties of the proposed service.

Step #3. Compare the list of benefits with competitors

The resulting list of characteristics should be compared with your competitors according to two principles: the presence of this property in the competitor, whether the competitor’s condition is better or yours.

Step #4. Seek Absolute Competitive Advantages

Among the sources of absolute competitive advantages, the following should be noted:

– the product is unique due to one or several properties;

– uniqueness in combination of properties;

– special components of the product composition, a unique combination of ingredients;

– certain actions are performed better, more efficiently and quickly;

– features of appearance, shape, packaging, method of sales or delivery;

– creation and implementation of innovations;

– unique technologies, methods for creating a product, patents;

– qualification of personnel and uniqueness of its human capital;

– the ability to provide the minimum cost in your industry, while assuming higher profits;

– special conditions of sales and after-sales service for consumers;

– availability of access to limited raw materials and resources.

Step #5. Look for “false” competitive advantages

First mover. Be the first to announce the properties of competitors’ products, before they have yet communicated them to their target audience;

Performance indicator. Creating your own performance measurement indicator;

Curiosity and interest. You can stand out thanks to a factor that is not considered decisive when purchasing, but will allow you to attract the attention of the target audience.

Step #6. Make a development and control plan

After identifying a competitive advantage, you need to formulate two further plans for marketing actions - a plan for developing your competitive advantage over the next few years and a plan for maintaining the relevance of the presented advantage.

How to Analyze Current Competitive Advantages

Stage 1. Make a list of evaluation parameters

Create a list of key competitive advantages of your product and competitors.

For assessment, a three-point scale is best suited, on which the following are rated:

1 point = the parameter is not fully reflected in the competitive advantages of the product;

2 points = the parameter is not fully reflected in the competitive advantage;

3 points = the parameter is fully reflected.

Stage 3. Make a development plan

Form your action plan aimed at improving the company's competitive advantage. It is necessary to plan improvements on assessment items that received less than three points.

How to develop competitive advantages

Competitive behavior in the market can be of three types:

Creative. Implementation of measures to create new components of market relations to gain a competitive advantage in the market;

Adaptive. Taking into account innovative changes in production, ahead of competitors in terms of modernization of production;

Providing and guaranteeing. The basis is the desire to maintain and stabilize the obtained competitive advantages and market positions in the long term by adding to the range, improving quality, and additional services to consumers.

The duration of maintaining competitive advantages depends on:

Source of competitive advantage. Can be a high and low order competitive advantage. The low-order advantage is represented by the possibility of using cheap raw materials, labor, components, materials, fuel and energy resources. At the same time, competitors can easily achieve low-order advantages by copying and searching for their sources of these advantages. The advantage of cheap labor can also lead to negative consequences for the enterprise. With low salaries for repairmen and drivers, they can be lured away by competitors. The advantages of a high order are the excellent reputation of the company, specially trained personnel, and production and technical base.

The number of obvious sources of competitive advantage in the enterprise. The greater number of competitive advantages an enterprise has will more seriously complicate the tasks of its pursuers and competitors;

Constant modernization of production.

How to survive a crisis and maintain a competitive advantage

Alexander Idrisov, managing partner of StrategyPartners, Moscow

1. Keep your finger on the pulse of events. One of the employees should collect and analyze information about the state and trends of the market, how these trends can affect the business, taking into account the study of consumer preferences, demand dynamics, data on investors and competitors.

2. Develop the most pessimistic forecast for your company.

3. Focus on paying customers.

4. Focus on a narrow range of tasks. You need to carefully examine your company's business model. This does not mean that you need to abolish all areas of your activity. But it is worth focusing on a narrow range of tasks, abandoning non-core tasks or areas that can be outsourced.

• Reframing, or How to deal with customer objections

5. Consider merging with competitors. Many companies are now ready for alliances with competitors on mutually beneficial terms.

6. Maintain relationships with potential investors. A particularly important condition during a crisis is that you must not lose contact with investors; it is better to activate them whenever possible.

Information about the author and company

Alexander Maryenko, project manager of the A Dan Dzo group of companies, Moscow. Graduated from the Faculty of Finance of Nizhny Novgorod State University. Participated in projects (more than 10, six of them as a manager) aimed at increasing the profitability of companies' businesses and solving their systemic problems.

John Shoal President of ServiceQualityInstitute, Minneapolis (Minnesota, USA). Considered the founder of service strategy. At the age of 25, he founded a firm specializing in teaching companies about service culture. Author of five best-selling books on the topic of service, translated into 11 languages ​​and sold in more than 40 countries.

ServiceQualityInstitute formed by John Schole in 1972. Specializes in the development and implementation of service strategies in companies. ServiceQualityInstitute specialists have trained more than 2 million people. The main office is located in Minneapolis, branches are located all over the world (in 47 countries), their share is 70% of the total number of representative offices of the company. In Russia, ServiceQualityInstitute and John Shoal are represented by ServiceFirst.

Tatiana Grigorenko, managing partner of 4B Solutions, Moscow.

4B Solutions Company founded in 2004. Provides outsourcing and consulting services. Areas of specialization: improving customer service systems, crisis management, professional legal and accounting support for business. The company's staff is over 20 people. Clients include the Business Aviation Association, Triol Corporation, Rafamet machine tool plant (Poland), ANCS Group, IFR Monitoring, MediaArtsGroup, and the Gaastra boutique chain.

Alexander Idrisov, managing partner of StrategyPartners, Moscow.

StrategyPartners. Field of activity: strategic consulting. Form of organization: LLC. Location: Moscow. Number of personnel: about 100 people. Main clients (completed projects): companies Atlant-M, Atlant Telecom, Vostok, GAZ, MTS, Press House, Razgulay, Rosenergoatom, Russian Machines, Talosto, "Tractor Plants", "Uralsvyazinform", "Tsaritsyno", publishing houses "Prosveshchenie", "Eksmo", Ministry of Information Technologies and Communications of the Russian Federation, Ministry of Regional Development of the Russian Federation, Murmansk Port, Rosprirodnadzor, administrations of the Arkhangelsk, Nizhny Novgorod, Tomsk regions and Krasnoyarsk Territory, Avantix company.