what are the factors to overcome competitive advantage

What are sustainable competitive advantages?

A competitive reward is by definition is when a brand uses its assets, its abilities, or its unique features to win out over its competitors. It'due south when a visitor consistently outperforms its competition due to a specific attribute.

Just the real question is: what are sustainable competitive advantages?

A sustainable competitive reward can last longer than a temporary rising in popularity. Information technology means building products, services, a brand, and a reputation that attracts consumers continually over time.

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What are competitive advantages, and how sustainable are they?

The factors that play into a competitive reward are numerous, and their sustainability can be greatly affected by external factors.

Unique products

Having a unique product or service can continue a company at the forefront of consumers' minds – but this might only last equally long every bit the competition doesn't outperform the original. First mover reward can only go so far as time goes on.

Renown for customer experience

Brand differentiation due to great customer service is often enough to sway consumers to a brand. Great customer service, quick issue resolution, and fast responses can put companies higher up the competition with improve products. Of course, the high level of customer feel needs to be maintained over fourth dimension for the competitive advantage to be sustainable.

A low-cost advantage

A visitor that can keep its operational and supply costs low can keep its prices low – and this can tempt consumers abroad from other providers. However, keeping costs low plenty is a fragile balancing act between weathering supply chain and manufacturing cost hikes and undercutting competitors.

Brand reputation

A brand that attracts its customers on the strength of its reputation lone is powerful – simply it tin can be a frail advantage if this reputation is not upheld. Committing to particular company values, monitoring make reputation, and ensuring customers continue to be happy over time is necessary for sustaining this advantage.

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Pricing power

A visitor that can raise its prices without disrupting its share of the market has pricing power. Companies that can leverage this every bit their competitive advantage have usually congenital a potent reputation that tin withstand price increases. However, as mentioned earlier, brand reputation can be fragile without maintenance.

Corporate strategic avails

If a visitor has advantageous assets – such every bit patents for technology, intellectual property trademarks, or copyrights, for example – they can often hold a stronger position over competitors in the same industry. That being said, if competitors create new inventions that are more effective, these assets tin can end upwards being less of import.

Products and services that can evolve

If a brand has products and services that can alter with the needs of the market, rather than remaining static, they tin outdo their contest more finer over fourth dimension. Additionally, new products on the aforementioned line can attract a loyal audience. Investing in this factor as a competitive advantage ways considering product and service lines' futures right from the beginning and planning alee carefully.

A strong greenbacks flow

Companies that have a stiff greenbacks flow have the power to make risky plays for market share – and can atmospheric condition storms more effectively than their competitors. Withal, this can easily be depleted if brand, production, or service issues become numerous and costly.

Why is having a sustainable competitive advantage important?

Understanding what your customers want and need – and what you'll need to have to meet those requirements – is how you tin can set yourself apart from your competitors.

The benefits of a competitive advantage

Growth: An edge above the competition means y'all can attract greater numbers of new customers – and abound exponentially as a result.
Market share: With a competitive advantage, a brand can have more of the market share.
Increased customer lifetime value: Providing something unique that customers tin can't observe elsewhere – from products to client experience – means that your audience stays with you lot longer.

How to use market inquiry to create a sustainable competitive advantage

Market place research can exist an incredibly powerful tool for identifying and developing your sustainable competitive advantage. In fact, just using data and analytics to inform your strategy tin can put you ahead.

Co-ordinate to McKinsey's research, companies that include data and analytics equally role of their strategy are 3 times more probable to country that their initiatives take added at least 20% to their earnings before interest and taxes (EBIT) over the prior 3 years. Investing in data and analytics for market research can put your company ahead of the bend and reap financial rewards.

Our ultimate guide to conducting market place research can give you the tools you need to become started – and help you to narrow down how to concenter a greater market share.

Even so, the points below contextualize how to utilise market research specifically for a sustainable competitive advantage.

The key questions to reply

To create a company characteristic that your competitors can't match, it's important to nail down the following details:

Benefits: What benefits does your advantage beget your customers? In other words, what is the real value of it?
Target marketplace/target market needs: Who volition be attracted to your competitive reward, and what do you demand to provide them to practise and so?
Competition: Who are your competitors, and what do they offer that you lot don't?

You can find out a lot of this data through market place research. Feedback can aid you to make up one's mind exactly what attracts your audience to yous, how it is of value to them, and what more you can practice to fulfill their needs. You can also empathize why your customers cull you over your competitors.

Fundamental factors to consider when carrying out market place research

Of import factors to consider include:

Understanding what metrics are useful: collecting metrics such as CSAT scores is useful, merely understanding what drives these scores is more helpful for understanding where you have a competitive advantage.
Choose your methods wisely: In that location are multiple means to collect feedback – only not all of them will be suitable for all customers at all times.
Use an always-on approach: A erstwhile study might help y'all develop an initial competitive advantage, but for a sustainable competitive advantage, you'll need to take the pulse of your audience continually over fourth dimension.
Automating your enquiry: Your team can only practise and so much themselves – and it'due south impossible to see all customer comments, social posts, emails, and client service calls all at once without help. Using a client feel direction tool can help y'all to see trends and competitive advantages with data gathered from all facets of your business.

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Customer experience as a sustainable advantage

One competitive advantage that can weather the test of fourth dimension is client experience.

No matter the change in purchasing power, lower-cost alternatives, or a saturated market, providing your customers with an unforgettable customer feel can give you the border over competitors.

The statistics bear this theory out. In our research, we've establish that:

95% percent of customers who believe a company's CX to exist "very good" are likely to recommend
94% of customers are "very likely" to repurchase if customer experience has been rated every bit "very good"
CX that is perceived as "very good" leads xc% of customers to say they are "very likely" to trust that business
64% of customers who rate CX as "very good" are very likely to try new products and services immediately after it'due south introduced

Many businesses can't compete for price or corporate assets – but they can compete in customer experience. Renowned for customer service builds stronger brand loyalty and can exist a more stable foundation for a competitive reward than i based on costs. It can win customers over over again and again – and draw them away from the competition.

Examples of customer feel as a sustainable competitive advantage

Below are some examples from our case studies on how focusing on customer experience tin can set up you up against the competition.

JetBlue

Jetblue believed its competitive advantage was its free luggage offer – simply after studying flight information and feedback on its customers on pricing, it found that customers instead preferred cheaper ticket prices.

Past taking feedback into account – and using Qualtrics' solutions for information gathering – JetBlue was able to improve client experience and develop it into a sustainable competitive reward.

BMW

Already renowned for their products, BMW has a history of having the competitive advantage for automotive performance. However, to increment its repurchase and return service rates and outdo the contest, it needed to reevaluate its CX program.

Overhauling its client experience management program meant that in Northern Europe, it could collate every customer comment, answer within 24 hours, and commit to issue resolution within 5 days. The level of exemplary customer experience BMW was able to attain – aslope its innovative products – has given information technology a more sustainable competitive reward.

Engie

In the highly saturated market of depression-carbon energy solution providers, Engie needs to constantly create adaptive solutions and grow to be competitive.

Using market research, the visitor was able to get feedback at speed and adapt its customer experience rapidly for improved outcomes and a sustainable competitive reward.

Related Article:How to Notice & Define Who Your Competitors Are

Make your customer feel stand out

Our research on the ROI of CX shows that investing in your client feel tin increase loyalty and create long-term financial dividends.

Read information technology at present to understand how you tin improve your CX.

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Source: https://www.qualtrics.com/experience-management/customer/sustainable-competitive-advantage/