The failure of most businesses stems from their inability to determine why they exist. What are they trying to achieve? Most businesses talk about their competitive advantages or unique selling points, but what they call a competitive advantage is vague and can hardly be understood. It is how they gain superiority over rivals by means of price, features, marketing, and different attributes. Being competitive means, you are mainly concerned with competing. It is a narrow scope that leads nowhere.
My argument is that many companies and businesses have ruined their businesses out of securing and protecting their competitive advantages. They are unsure of what set them apart from the crowd. It is the focus on the products’ features and attributes. Profit maximization is the goal number one. The decisions are always expressed in financial terms.
It is not about formulating, developing, and implementing the strategies to maintain and sustain the competitive advantage. It is primarily about understanding the term. Has the term ever been questioned before? Is it correct to keep using the word competitive? Leading companies do not compete, they lead. The term competitive advantage became a business term when Michael Porter published his book in 1984 of that title. Porter described in his book the three generic strategies for achieving competitive advantage which are : Cost leadership, differentiation, and focus. As per Porter, there are two central points underline the choice of a competitive strategy:
- The attractiveness of industries for long-term profitability, so it is the industry itself.
- The relative competitive position within an industry.
To discover your competitive advantage as per Michael Porter. Be different, produce with less cost and choose a profitable industry. Is it a good way to find your competitive advantage? We know that the market by nature is very competitive. Teaching good competition is to make other businesses aware of the fact that good competition leads to improvement, continuous learning, and innovation not competing for trivial differences.
Companies whose competitive advantages are to lower prices to undercut the competition and add some extra glittery features to their products tend to equate and decorate their marketing with neurolinguistics programming and some sorts of trickery. Manipulation is their daily practice. The good news is that if people develop the ability to detect manipulation, they will dramatically improve effectiveness at judging and discovering companies that have a leading advantage from those which do not. To detect manipulation, look for one or more of its major hallmarks by answering the following questions.
- What is the challenge that the business is set to overcome?
- Does the business produce products and deliver services that satisfy people’s true needs or desires?
- Does the business produce products and deliver services that add true value to people.
- Do you feel that you are a valued human being while using their products or services or just a consumer who consumes and pays more?
If you doubt the answers to these questions, then such companies exist to make profits only and profits are the center of their universe, not people. Their competitive advantage is measured in dollars, pounds, or euros.
The leading advantage should be established on the mark of contributing genuinely to the true needs of people. It comes from starting or restarting a business that solves a problem and drives prosperity to the whole society not only to the owners and the shareholders. It is always about people. There is nothing called a competitive advantage in business, there is a leading advantage that the business leaders strive to contribute and bring to the whole world. Does your business have one?