Waste Management and Skip Hire Specialists

Competitive Advantage


For a business to have a niche in the market place, it needs to find a sustainable competitive advantage so that it remains ahead of its rivals.

One way of having a competitive advantage is by either giving your clients a better price or more services and benefits.

There are four suggestions that can give your business that competitive edge. The strategies are in several categories. The broad range of market segments which include differentiation and cost leadership strategies and the narrow range of markets which include differentiation focus and cost focus.

Cost Leadership

This strategy seeks to make the business the business the lowest-cost producer in the market. This is achieved by the approach of mass production so as to capitalize on economies of scale. The importance of this strategy to the business is that they can produce goods that are generally acceptable to most consumers at a cost which will enable them recover with the best profits in the market. The strategy also gives room for the business to give discounts on their products which will maximize their sales and thereby increase market share.

A business that opts for this strategy needs to have good cooperation of all the functions within the business and try to implement aspects like high productivity, capacity building and utilization, bargain for the least prices of their input materials, use of lean production processes and utilizing technology as well as have access to distribution channels that are effective.

Differentiation Focus

In this strategy, a business seeks to meet the needs of a specific group of consumers who may have the need to have the same product but with a special touch. One thing that a business opting for this strategy should be sure of is, there is an actual need from the customers and that this need is not being satisfied by the products as they are and thus have a valid reason for differentiating.

There are several small businesses that have made it by making use of this strategy. They have managed to charge a higher price for their value added products than the undifferentiated products.

Differentiation Leadership

This approach is whereby the business seeks and targets much bigger markets. In this case, the business will add value to their products and therefore charge a premium price for it. The strategy requires substantial investment in marketing the product and there are various ways of doing so such as features and benefits of the product should be of high quality, branding, which ensures that the product is being recognized by the consumers, a product that can be distributed by all major channels including retailers. At the same time, the business would have to invest in consistent promotional activities for the product.

Nike and Mercedes are good examples of brands that have made in their respective industries by use of differentiation leadership. They have great economies of scale, even if they are not dependent of cost leadership to compete with their business rivals. The have managed to sell their products with emphasis on brand and convincing their consumers for be loyal to these brands while paying a premium price for it.

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