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Create a competitive advantage and stand out from the competition
Reading time: 7 minutes
Updated 05 April 2023

Create a competitive advantage and stand out from the competition

The presence of more or less intense and fierce competition can make the difference for the success of your new business. When you find yourself clashing with different competitors, to attract new clients and customers it is essential to stand out among the many rivals in the eyes of customers. How can you manage to do this? By developing and maintaining your unique competitive advantage.

Understanding if you have the necessary resources to face this adventure and immediately identifying what makes your business unique are only the first steps you are called to take. The main challenge is being able to offer higher value and/or greater benefits than what your competition is proposing.

There are so many ways to do it and you are about to discover them; first, however, let’s clarify the definition of competitive advantage and Unique Selling Proposition, also known as USP or Unique Selling Point.


Competitive advantage: what it is

The concept of competitive advantage, in economics, refers to a theory that describes how it is possible to beat the competition.

Its definition is due to Michael Porter, of Harvard University, who in 1985 published a book entitled “Competitive Advantage”. According to Michael Porter, competitive advantage means “being different”, that is, in other words, “deliberately choosing different activities to convey a set of values”.

According to the theory formulated by Michael Porter, there are two main strategies for gaining a competitive advantage over the competition: reducing costs (in this case we speak of “Cost leadership strategy“) and differentiating the offer from that of one’s competitors. (“Differential strategy”).

More specifically, you can gain a competitive cost advantage by selling your product or service at a lower price than that offered by competing companies. In this way, you can snatch customers from competitors, but this strategy will not prove particularly helpful if you want to build loyalty around your brand, because any revival of competition would risk putting you in a position of weakness.

If you are interested in acquiring a competitive cost advantage, remember, in this regard, that the “race to the bottom” with the competition risks bringing you to a point where the price offered on the market is no longer convenient and sustainable for you. Not only that: low prices risk being perceived by customers as synonymous with poor quality. In any case, if you decide to focus on this strategy, be careful to keep your operating costs as low as possible, because only in this way will you be able to find a satisfactory balance between costs and revenues.

There are several ways to ensure a differentiating competitive advantage: you can offer a product or service that is not on the market or, for example, you can focus on that added value that makes your offer truly unique, such as an excellent customer experience. Promoting the aspect that distinguishes you more and better from the competition is essential because it makes customers understand why they should choose your product or service.

Both in terms of cost competitive advantage and in terms of the competitive advantage of differentiation, opting for a niche market gives you the opportunity to have greater room for maneuver (and success), since in this way you avoid clashing with already established and consolidated brands. Not surprisingly, Porter’s model distinguishes between broad cost advantage and niche cost advantage (which ensures higher profit margins) and between broad differentiation and niche differentiation (which gives the possibility to understand more and better the public and to build value and loyalty more easily).


USP, Unique selling proposition: what is it?

The time has come to deepen the concept, previously only mentioned, of Unique selling proposition.

As already pointed out, communicating in a clear, simple and immediate way to customers what is the element that makes your product or service unique is crucial. The Unique selling proposition is precisely that message that differentiates you from the competition. In more practical terms, the USP leverages the main strengths, that is, the elements that make your brand or product or service unique and valuable to customers.

Uniqueness, as mentioned, does not necessarily refer to the product or service itself: focus on your message and make sure it is new. No competitor must have already proposed it on the market. That the Unique selling proposition is unique, however, has relative importance: uniqueness, in fact, acquires value only when it refers to a need or desire of your target audience.

Do not be generic: another characteristic of the Unique selling proposition is, in fact, specificity. Having a specific positioning makes your message stronger, easier to remember and defensible over time, because it is more difficult for competing companies to copy you.

Very often, we tend to confuse the Unique selling proposition with a slogan; the latter, however, is just one of the many ways of communicating the USP. The concept of Unique selling proposition, on the other hand, is much broader and you must express it, as well as with words, also in practice, integrating it in all sectors of your business.


How to create unique selling propositions

Now that you have clearer what a Unique selling proposition is (and what it is not), it remains for you to understand, in more concrete terms, how you can create one. The way in which to differentiate your product or service inevitably depends on what you offer, on the target market and on the competition within it; nevertheless, however, you can refer to some general indications that will make it easier for you to create your USP.

First of all, you should draw up a list of all the strengths of your brand and your product or service. The elements that distinguish them from the competition must be very specific, that is, respond to a very specific need and provide a clear solution to the problem.

Monitoring and analyzing the competition will then allow you to understand the positioning of other brands. In this way, it will be easier for you to find the space where you can fit in with your product or service. That space corresponds to a still unsatisfied need of customers: go in search of all the needs that your competitors have not yet been able to fill.

In this regard, it is appropriate to make a clarification: even if you are the first to offer a certain product or service and you think you have intercepted a new market niche without direct competitors, you must think very carefully about your USP. This, in fact, does not mean that you have no competition (or that you will not have any): being the first to respond to a certain need or desire means having to fight with the fact that, up to that moment, your customers have managed to live even without your product or service. Think about this when deciding what to communicate and how to do it.

Putting your Unique selling proposition on paper can be very useful for you: it helps you to better focus your positioning statement and to clarify all the elements that revolve around it, starting with your target audience.

Finally, once you have identified the right Unique selling proposition for you, think ahead and think about how you can integrate it into all phases of your business.

Your work does not end with the creation of the Unique selling proposition: you must, in fact, continue to monitor your customers because their needs change over time and you must make sure that your USP remains unique and valid. Also keep an eye on new operators entering your target market and monitor the costs and benefits of your Unique selling proposition, in order to guarantee you always adequate profit margins.


How to stand out from the competition

Now you know what we mean when we talk about competitive advantage and the Unique selling proposition. Not enough: you must have a clear idea of how, in practice, you can stand out from the competition.

The initial challenge is to find something where you really are significantly better than any possible competitor. After all, as stated by the co-founder of Instagram Kevin Systrom:

“great products sell themselves”

Work to amaze, engage and, above all, 100% satisfy your customers, offering the best possible shopping experience, but be careful never to compare yourself directly with competitors: this would shift the attention to them, while your attention, and especially that of your customers, must be focused on you.

Pay particular attention to branding: your brand must be recognizable and always consistent, i.e. in line with your Unique selling proposition. Not only that: it must also always be present and clearly visible. In this regard, do not forget to also take care of the packaging of your products, an increasingly important aspect for customers today.

Like the brand, your tone of voice must be clear and consistent at all times. Be careful: the tone of voice is not only about the texts, but also the images you use to promote your brand.

If you are convinced that your product is superior to that of other operators on the market, offer it in different variants. This allows you to further distinguish yourself from the competition and consolidate your position of strength.

Generally speaking, if it is true that you do not have absolute control over market prices, you can instead have it over the experiences you can think of to amaze, engage and satisfy your customers. Focus on them because, in this way, as already pointed out, it will also be easier to defend the competitive advantage you have acquired.

The discourse on the price is, however, more complex: if you do not have the possibility to further reduce it (because this would mean not having profit margins), worry about motivating your choice with the utmost transparency, clarifying in a precise and complete way where your earnings go. This too can ensure you have a good competitive advantage within your target market; the challenge, it will be clear to you by now, is to communicate your sales argument in a precise and honest way.

Nicola Zanetti

Founder B-PlanNow® | Startup mentor | Startup consulting & marketing strategist | Leading startup to scaleup | Private angel investor | Ecommerce Manager | Professional trainer | Book writer

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