Competitive Advantage - YouTube

The last part I want to cover in this series is the concept of competitive advantage.

There could be something about your business, some strength that allows your business to

succeed where others do not or allows it to compete in someway that others cannot.

And this Competitive Advantage ups the likelihood of you translating value to the end customer

in a sufficient amount and type that or excuse me, transmit value to the customer that in

return you receive the desire and amount of type value back.

All right, grabbing enough market share, having a high enough volume et cetera.

Okay, what are some of the types of competitive advantage well generally it's – the purest

form of competitive advantage is considered when you have no competitors who can compete

with you.

That’s generally only the case when you have a government granted monopoly and what

I'm referring is intellectual property rights.

You’ve created some novel design or function or utility process that the government allows

you to do without competition to exclude others from copying that design or process.

Now that is in essence is government granted monopoly that you compete in this way where

others can't.

That is the purest form of advantage but there are other forms of advantage operationally

that allows you to do things in a way that others can't to achieve your differentiation

or achieve your low cost or to maintain in a niche market.

That could be first move or advantage.

You’ve established your name, your brand first, that level of recognition, the confidence

or the loyalty that customers have towards your company or brand that you’ve established

gives you an advantage over others that try to compete in that same space that try to

steal away some percentage of the market that you’ve – that you address.

Okay, business size and capitalization is a huge advantage.

While it may not be a long term or sustainable competitive advantage especially as competitors

combine, grow and also acquire resources and operational capabilities but temporarily it

can be huge advantage that your economy’s scale can push down the cost or prices that

you have the money to invest in a new infrastructure or resources to produce your value more efficiently

or effectively than other competitors.

Again your location, your – it could be a temporary competitive advantage that you

can reach customers or end users more effectively than the other competitors or substitute products

in the market that something about that market is unique.

This is particularly true with your focus strategy or focus orientation where you're

serving a specific group and they're geographically located and you have some level of advantage

because you as well are located more effectively or efficiently to serve that market.

Distribution advantages, maybe you have infrastructure in place or you have strategic relationship

that allow you to more efficiently carry out your operations or your logistics or your

delivery of the product or service.

You have these inroads already established and that’s a temporary competitive advantage

because it's difficult for your competitors to copy that in some way.

Maybe your internal management of personnel, maybe you have some true talent internally

that is not present in other places.

This is particularly important in firms that have a strong technology or science base,

individual researchers or individual programmers can make all the difference in the world in

what they can create or their innovation with regard to new value propositions for the customer.

So, again that could be a significant advantage, and in any business perhaps you have a visionary,

somebody who is able to recognize value propositions and able to motivate other individuals to

assemble the resources in a way that others just have not demonstrated the ability to

do.

In this case I'm thinking of the Steve Jobs of the world.

That can be a significant advantage.

Perhaps you have a legal advantage.

Again, the licensing requirements or zoning restrictions or something of that nature that

gives you a competitive advantage over others, a CPA is going to have an advantage because

that firm can practice financial service or accounting services that a non-licensed individual

cannot the same way with legal practice, the same way with medicine, et cetera.

So, again legal barriers can exist that will give some temporary or long term advantage

to a given group versus others.

And then again industry relationship, are there any join venture opportunities, partnerships

or just a strategic relationships with other companies, businesses, individuals that would

give you some level of – of competitive advantage whether temporary or long term.

Okay, so just consider these because this should be your objectives.

You should focus on these to see especially with new companies that are entering the market,

obtaining some level of early competitive advantage could be key to achieving the level

of growth desired or necessary to make the business sustainable.

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