Assuming you have completed your SWOT, it’s now time to put it to work and develop your competitive advantages. Let’s start with the strengths quadrant. This is the basis for digging deeper to identify what your competitive advantages are, or could be.
What is a competitive advantage? Often starting with what something isn’t is easiest. Your competitive advantage is not a list of your strengths. Why? Because if your competitive advantage(s) list is only comprised of strengths it is not a “competitive” advantage. Key word – competitive. If you don’t have a competitive advantage comprised of more than strengths, you don’t compete. You exist.
Your competitive advantage is what your organization does better than anyone else. The sustainable part refers to your ability to continue to do those things over a long period of time. And yes, you can have more than one advantage and you can develop advantages as well. You don’t have to possess them all now.
Here are examples of competitive advantages that hit the mark.
- eBay offers the least expensive, most effective solution to just about anyone who wishes to buy or sell a personal item because of its broad user base, seller ratings, easy to use software, and PayPal payment system.
- Yoga to the People has a philosophy that yoga should be accessible to all and they’ve built a donation-based system to support it.
Once you land on your current and potential competitive advantages, what do you do with it? Use the list as a guide during the rest of your planning to:
- Establish goals that build on competitive advantages to pursue
- Determine opportunities to pursue and which to pass by
- Decide where to allocate resources and where to cut back
- When to outsource (to another department or externally) and when to keep it in house
How to Identify Competitive Advantages with Your Team
Lead your team in the 30-Second Competitive Advantage Challenge!
Set the stage with participants pretending they are at a networking event where an acquaintance approaches and says, “Hi, nice to meet you. Tell me a little about your company. What is your company best at?” Ask each participant to write down his/her answer, then to pair up to share their responses in 30 seconds.
Report out and compare against the strengths developed during the SWOT process. Develop a short list that you can use to refine and add to over time.
The Bottom Line
High-performing organizations in this world have a razor sharp understanding of their competitive advantages. Everything they do builds and nurtures their DNA. You don’t have to be a Fortune 100 company to be that effective and that good. Running your business on the basis of your competitive advantages is the most important thing you can do as a leader of your organization or department.
The easiest way to find your competitive advantage is to answer these questions: What is my company best at in my market? Why? Lead your team through this fun exercise that not only spurs great thinking, it is also good practice!
Watch this video for more great ideas on how to identify your competitive advantage!