Companies can make a number of different strategic moves to build competitive advantage. The aim is to create a clear difference that is important to your customers, and is something your competitors cannot match. You can create competitive advantage by developing a strategy of leadership in factors such as cost, quality, innovation and customer experience. However, according to PRTM Management Consulting, you should identify the one thing that you do extraordinarily well and focus your strategy on that.
Your information systems strategy can build a strong competitive advantage by enabling you to capture and share the knowledge of experts in the company. Using knowledge-capture software or a secure forum on your website, you can ask experts to contribute best practice, advice or information on important business processes. Sharing that knowledge can help you reduce costs or improve performance and efficiency in areas that provide competitive advantage, such as product development, engineering, manufacturing and customer service.
Costs provide you with an important competitive advantage. By becoming a low-cost producer, you can offer customers prices that your competitors may not be able to match. If you can offer low prices while maintaining quality, you can strengthen competitive advantage further. You can make a number of strategic moves to reduce costs, including investing in efficient production equipment, outsourcing manufacturing to a low-cost producer, or collaborating with suppliers to improve supply-chain efficiency.
A strategy of innovation gives you a competitive advantage by developing products that differentiate your company and meet customer needs more effectively than competitors. Focus your product development program on features that offer customers exceptional value or unique benefits. Those innovative features will provide a strong advantage because competitors will find it difficult to imitate them or provide substitutes that offer the same value.
A partnership strategy can improve many aspects of competitive advantage. Working with partners can give you access to strategically important skills, components or other resources that enable you to innovate in your operations and products. Integrating your operations with partners in the supply chain can also improve competitive advantage by giving you exclusive access to key supplies and creating barriers to entry for competitors.
Knowledge of customers and exceptional service are the only sustainable form of competitive advantage, according to Forrester Research. To achieve that, you need to invest in four key areas: customer research; quality of customer experience and customer service; sales channels that provide high levels of customer information; and marketing material that uses customer information to create high levels of personalization.