To gain a competitive edge in business, it is essential to understand the DNA footprint of your ideal customer and reward behaviors that support corporate mission and value. Research your competitors and survey your customers to gain insight into their needs. If you're having difficulty gaining an advantage, you can hire a consulting firm to analyze your target market. A successful business strategy is to define your niche as narrowly as possible and become known for being the best in that limited niche. How can you gain an edge to drive the growth of your organization? Here are five sources of competitive advantage that you can leverage for your business strategy: reducing prices, investing more time in staff training, providing faster service, offering specialized products, and understanding customer willingness to pay.
For instance, business support systems company CSG reports that 47 percent of consumers are willing to pay more for sustainably sourced products, with five percent willing to pay twice the price for a sustainable product than for an unsustainable one. Gallup reports that business units with highly engaged employees see a 21 percent increase in profits compared to their less committed counterparts. Employee engagement has been especially important during the coronavirus (COVID-19) pandemic, as many companies have closed physical offices and have made the transition to remote work. By finding ways to effectively engage your team in a virtual environment, you can make them feel supported and empowered from afar. An important concept that highlights the role of information technology in competition is the “value chain”. We call these activities “value activities”.
The value that a company creates is measured by the amount that buyers are willing to pay for a product or service. A company is profitable if the value it creates exceeds the cost of carrying out value activities. Having good relationships with suppliers and sales representatives is an often overlooked competitive advantage over other companies that haven't taken the time to build this closeness. If you want strong customer relationships to be your competitive advantage, make sure you take every opportunity to interact with your customers, be transparent with them, show your appreciation for their business, and personalize their experience. Competing domestically or globally with a coordinated strategy can create a competitive advantage over local or national rivals. In addition to carefully analyzing its value chain, a company must consider how information technology could enable a change in the competitive environment.
The way you price your products should be strategic, useful and give your company an advantage over its competitors. Executives should review these activities to determine the ways in which information technology can create a sustainable competitive advantage. One of the best ways to compete against larger companies is to form alliances and joint ventures with other companies.
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