Creating a Competitive Advantage in Already Competitive Markets

Recently, Tesla has dominated the market with a trillion-dollar stock value, making its CEO, Elon Musk, the richest man in the world as he is now worth more than $300 billion. However, the electric cars industry has been operating for a century now, so we need to ask ourselves how Tesla achieved this huge success.

Aside from the brilliant engineering systems and ambitious plans that Tesla and its CEO have executed, from a marketing perspective, one aspect that made all the difference is the competitive advantage.

Competitive advantage is having the advantage over your competitors to meet a customer's needs. It is the starting point for any business and the reason why some businesses collapse while others thrive. As an e-commerce specialist in the European marketplace for LCW retailers, it is my responsibility to create that advantage and create a broader customer base with loyalty at the core, which is not an easy task to embark on nor a stroke of luck but can be achieved when employing specific methodology and tactics.

Your road to creating a competitive advantage starts with answering five simple questions. The answer to each question should be shared by all your team members as it will provide the basis for all your plans to navigate through the market.

Businesses operating in any sector or industry should determine their customers’ profile and specify their customers’ segment. It is essential to conduct thorough research to determine demographics such as gender, age, socio-economic status, interests, source of news, and location. A business should not try to serve all segments but instead focus on one and try to meet its demands. For example, Tesla focused on environmentally-aware clients who were not satisfied with the small and slow electric cars available at that time. Tesla offered what customers were looking for, reliable vehicles with zero carbon emissions, a luxurious design, and racing cars' speed.

How to identify your customers? First, identify the customer segments in your market. Ensure using different combinations of demographics and interests, then determine each segment size in your market and your ability to identify their problems and develop the product or service they are looking for. Not recognizing your customers make businesses vulnerable, just like shooting a rocket to the stars, unable to reach the goal.

After identifying the customer segment, the business has to determine the needs of its segment in order to create a product-market fit. For example, if our customer segment is 15-25 years old youth interested in online gaming with mid-level budgets to spend. Then, we need to create a budget-friendly, engaging online gaming platform with good speed and exciting features. 

The business then needs to align its resources and capacities to deliver the product that meets its customers’ needs. The other aspect would be to create a loyal customer base. Any product or service should have an underlying social meaning for the customer not only to interact with but also to be part of a community. The social meaning or value of any product or service is vital to keep the business in the field for the long run. Therefore, the company's mission should always be embedded in that social value and have an emotional sentiment to build a connection with its customers base.

Marketing is another aspect that businesses should pay a great deal of attention to. Thus, the product or service can reach their customer segment. Companies should think creatively and out of the box and consider which channels to use and which social media platforms do their customers prefer. In the case of our example, it will probably be Instagram and TikTok, and this is where the budget should be mostly spent. The business should also adapt to the changing world and the developing needs of their customers.

Many businesses could have a successful start but end up deteriorating along the way. This is due to the lack of planning for long-term strategies and key performance indicators (KPIs). The business should have a more extensive plan and goals other than just making a profit. There are many startups, for example, that only focus on short-term success, and while you should enjoy and celebrate your small wins, you should also consider your long-term strategy so you can anticipate the upcoming surprises. In addition, businesses should have clear KPIs on a quarterly basis to know where they stand and how to re-adjust their business plan to align with the changes in the market.

Starting a business requires various resources like human resources, capital, know-how, and other variables like land and equipment. Establishing a business also requires finding reliable partners who share the same mission, vision, and values which is one of the essential cruces of business.

The key is to adapt fast to changes; no product or service can stay stagnant and still maintain the same demand and meet customers' expectations. Change is the only constant in life. Therefore, businesses should keep innovating, developing, and expanding their product line and service. A business can create new products to serve new customer needs, target more customer segments, or upgrade and add more features to the current products to keep them relevant. 

Businesses should also create a customer community, ensure that the customers are a part of the development, and ask for their input and feedback on the products and services. Moreover, businesses should be creative, innovative, and courageous to take a risk to differentiate their products and dominate their market share. While keeping an eye on other competitors is important, businesses should not follow blindly in the steps of others; instead, they have to pave their own way in the market.