The 5 types of competitive advantages
Posted: Mon Jan 06, 2025 7:03 am
Porter investigated different ways of positioning a business through its competitive advantages . We share with you the 5 most important ones:
1. Comparison
What is a competitive advantage based on comparison? It is offering a product that the competition also has, but selling it better (for price, presentation, advertising and much more!).
2. Differential
Let's take a look at what a competitive advantage based on differential is. What is sought in this case is that the product offered is different from that offered by the rest of the competitors.
Now, users know that there are many brands that sell the same thing, but if your product is truly unique (due to its design, system, technology, innovation, etc.) it will stand out for its features and the consumer will go ahead and buy it.
In this item, it is important that you take into number library account a very high quality and innovation in your product or service, because it is this value that consumers will take into account within the market.
All of this will increase your costs, so you will have to turn this advantage into an investment.
Boost your brand by creating your own online store.
3. By approach
If your differentiation strategy was based on what made you unique in the market in general, here you are targeting a very specific market segment . That is, you will have to be the best in quality and innovation and, at the same time, target a smaller niche that is aware of and interested in your product.
So, if you have an e-commerce business in particular , you are going to have to innovate and do the best in that space to differentiate yourself and be the best.
In cost
When making a purchase, money is always a consideration. How much does your product cost? What prices does the competition offer? What is their price range?
If your business has lower prices than your competitors, with similar service and quality, you will quickly negate any advantage your competitor has.
If you are going to lean towards this type of competitive advantage , it is important that you keep in mind:
Standardization : This allows you to offer a lot of products of the same quality at the same price.
Differentiation : It is often difficult for these products to have a wide variety of significant and differential characteristics compared to other sellers, which will once again put the focus on value.
This type of competitiveness is usually based on learning, since as you advance with your business you will make more products and reduce their production time. In addition, the more experience you have, the more renowned your brand will be in this field.
5. Sustainable
Competitive advantages can be planned for the long term. This allows businesses to build on them for years and they are usually related to products that only that business can market.
In other words, they have the potential to create a new market, which is why investment is made in creating a novel development.
When you want to review what competitive advantage is , you only have to focus on its 3 main characteristics:
Make it unique . That is, there cannot be another company that offers exactly the same thing as your business. Put your creativity and innovation into practice by looking for that difference!
Don't make it easy to imitate . You will often have original ideas, but it is key that they are not easy to copy in the short term. If the competition identifies your advantage, they may be able to match it.
Make it sustainable over time . True competition is based on the strength of time, on improving and maintaining! It is very important to measure each step and know the strength of your company so that no one can surpass you.
1. Comparison
What is a competitive advantage based on comparison? It is offering a product that the competition also has, but selling it better (for price, presentation, advertising and much more!).
2. Differential
Let's take a look at what a competitive advantage based on differential is. What is sought in this case is that the product offered is different from that offered by the rest of the competitors.
Now, users know that there are many brands that sell the same thing, but if your product is truly unique (due to its design, system, technology, innovation, etc.) it will stand out for its features and the consumer will go ahead and buy it.
In this item, it is important that you take into number library account a very high quality and innovation in your product or service, because it is this value that consumers will take into account within the market.
All of this will increase your costs, so you will have to turn this advantage into an investment.
Boost your brand by creating your own online store.
3. By approach
If your differentiation strategy was based on what made you unique in the market in general, here you are targeting a very specific market segment . That is, you will have to be the best in quality and innovation and, at the same time, target a smaller niche that is aware of and interested in your product.
So, if you have an e-commerce business in particular , you are going to have to innovate and do the best in that space to differentiate yourself and be the best.
In cost
When making a purchase, money is always a consideration. How much does your product cost? What prices does the competition offer? What is their price range?
If your business has lower prices than your competitors, with similar service and quality, you will quickly negate any advantage your competitor has.
If you are going to lean towards this type of competitive advantage , it is important that you keep in mind:
Standardization : This allows you to offer a lot of products of the same quality at the same price.
Differentiation : It is often difficult for these products to have a wide variety of significant and differential characteristics compared to other sellers, which will once again put the focus on value.
This type of competitiveness is usually based on learning, since as you advance with your business you will make more products and reduce their production time. In addition, the more experience you have, the more renowned your brand will be in this field.
5. Sustainable
Competitive advantages can be planned for the long term. This allows businesses to build on them for years and they are usually related to products that only that business can market.
In other words, they have the potential to create a new market, which is why investment is made in creating a novel development.
When you want to review what competitive advantage is , you only have to focus on its 3 main characteristics:
Make it unique . That is, there cannot be another company that offers exactly the same thing as your business. Put your creativity and innovation into practice by looking for that difference!
Don't make it easy to imitate . You will often have original ideas, but it is key that they are not easy to copy in the short term. If the competition identifies your advantage, they may be able to match it.
Make it sustainable over time . True competition is based on the strength of time, on improving and maintaining! It is very important to measure each step and know the strength of your company so that no one can surpass you.