- Identifying unique and relevant aspects of your business
- Attributes to establish a unique competitive advantage
- Validating the aspects of your competitive advantage
Skill Level Beginner
- Unique competitive advantage basically is just what makes you special and different amongst all of your other competitors. What makes you unstoppable in the marketplace and something that a customer can't get anywhere but from you? And that's really the question that you're trying to answer. Why is this so important? It helps your customers really understand why they should buy from you versus why they should go to somebody else. And if they understand that, they really understand those core points, you are going to get customers all day long. Other thing that it does is it actually drives your strategy. It really is core to your overall business strategy. And when you get down to your unique competitive advantage, it will drive your positioning strategy, your marketing, all of your sales activity. So you want to nail this one down, 'cause it's what your sales people and your marketing materials will repeat over and over again. And then your investors. Your investors require it. They want to know what makes you different from everybody else. And they'll ask you this question when you're meeting with them. So make sure you have a really good answer for them. One of the new hot travel destinations out there is Iceland. And I've been there twice in the last two years and I absolutely love it. What's interesting about it is it kind of brings in our example of a unique competitive advantage. About seven or eight years ago, an airline started up by an entrepreneur, a wonderful entrepreneur who said I can do things differently and I can create a unique competitive advantage against the incumbent which is Icelandair, which has been there for years. They're a very stoic airline, almost like a state run airline as well. And he said, I can do things differently. And what he did differently was his unique competitive advantage. Icelandair had very few direct routes into the US. I think they had three or four cities when this guy started. So it was very difficult. I know when I went to Iceland on Icelandair the first time, I had to go up San Francisco to Seattle, Seattle to Reykjavik. And it took about 12 or 13 hours. And the second time I went, I went on WOW airline and it went direct from San Francisco right up to Reykjavik in less than eight hours. Pretty convenient for me and that's his unique competitive edge. He created different direct flight routes from the US into Reykjavik and then from Reykjavik all throughout Europe. Pretty ingenious, actually. And so by doing this and creating this unique competitive advantage, he was able to get customers. So WOW airline is credited for the incredible boom in tourism in Iceland. In fact, about five years ago, they had about 200,000 tourists. And today, they have over two million tourists. And a lot of that is because WOW airline created direct routes from the US right into Reykjavik. So he created a unique competitive advantage for his business and really began to take over the market. So much so that Icelandair who was on the run, they had to actually catch up to him and they've actually added more direct flights into the US. But they're still not caught up to him yet. He also married his unique competitive advantage to one other important thing. He was a low price leader. Icelandair was very expensive. He actually came in and said, you know what, I'm going to give a bare bones market and I'm going to give direct flight. So hear what I've got, I got convenience, and I got cheap fares. Why wouldn't I fly WOW airline? In addition they had a couple other advantages where they use technology throughout their airline since they were only seven or eight years old. They could actually embed their entire business and steeped in technology where Icelandair was far behind them. So if you start looking and marrying some of these competitive advantages together, they really created something unique and different experience for the traveler. Their core unique competitive advantage really was the direct flights. That's what really established them as the leader in this marketplace. It was very compelling for customers to have that. They combined it with lower prices. They combined it with some other advantages, but really that was the core. I want you to take that example and I want you to apply it to your business. Think about what is really that core competitive advantage that you might have that you can bring out and dominate an industry just like WOW airline did against their really strong competitor, Icelandair. In order to make a great unique competitive advantage, I really want you to think of these four things because these four tests will really help you understand whether or not you've got it, or you need to do some work on it. First, is it differentiated? Meaning is it unique enough amongst all the other competitors in the marketplace. Second is, is it sustainable? Does this actually sustain over time? Is it temporary or will fade out? And that's not so good. Is it defensible? And really what defensible means is how easy can it be copied? Can you defend it? And fourth is how relevant it is to your customer base. Because if you come up with a competitive advantage that customers don't care about, then it's really not that important of a competitive advantage for you to go after. I want you to apply these four tests to your unique competitive advantage. Ask yourself those questions now and see how strong your unique competitive advantage is.