4 Competitive Advantage Strategies in a Crowded Tech Industry
In an ever-growing industry built upon the very evolution of technology, it can be surprisingly easy to rely on strategies that make you blind to any real issues at hand or possible room for growth. With a knowledge of what’s worked in the past and insight into new emerging strategies, you’ll soon have the tools you need to whip your business into competitive shape.
American business strategist Michael Porter is a name you’ll often hear associated with competitive advantage strategies because, in many ways, he is seen as the father of the entire modern concept.
His Five Forces, printed in 1979, were the first clear examples of mainstream publicized business analysis tools based on the relationship between businesses and customers within a single market. These “forces” consisted of competitive rivalry, the bargaining power of suppliers, the bargaining power of customers, the threat of new entrants, and the threat of substitute products or services. The most successful competitive strategies today are often directly inspired by Porter’s ideas, or at the very least, keep those driving forces in mind.
1) Disruptive Innovation
Products or businesses that only conform to industry standard practices will not stand out. If you hope to stand apart from the competition, then it’s more important than ever to find your uniqueness factor. This is a fairly modern strategy that has worked and thrived in today’s digital and internet-based culture. When so many people have access to so many services at their fingertips, it can be hard to stand out. Disruptive Innovation is the idea that your services will be so unique or brand new in concept, that they’ll literally disrupt business as usual.
Many consider companies like Uber as an example of disruptive innovation. Taxi cabs already existed, but so did the thousands of drivers out there who were looking for part-time, on-demand driving jobs. By utilizing pre-existing industry practices but disrupting the preexisting standards, Uber introduced a new take on a traditional industry. Their innovation paid off too, as Uber has effectively flipped the entire business model of on-demand car service on its head.
2) Product Personalization
Honing in on personalizing an aspect of your customer’s needs even further can create a new niche market. Taking the level of personalization just one step beyond what your competitor is already doing could be enough to keep you in business or to even take the lead.
Consider the fact that there’s already an entire industry of businesses dedicated to personalizing products by engraving pens, stitching initials into bath towels, or simply offering a wide range of product colors to choose from. Think back to Apple’s re-release of various iPod models that came in flashy new colors months after the first model had been released.
In the past, personalizing products by the simplest of factors like gender has worked. Nair for Men is packaged differently than the hair removing product for women. Many soaps and lotions have the same active ingredients but smell muskier or more floral depending upon who the target customer is. Personalization has been proven to work time and time again.
This is a great strategy for startups to take advantage. Not only will their personalized, niche approach help them stand out, but it will also help them avoid needing to go up against any pre-existing name-brand competition. Personalization allows you to focus on possibly stealing away one of their sub-audiences at a time. The more personalized the service a business advisor can offer, the more demand they'll experience from a unique yet growing customer base.
3) Prove Cost Effectiveness
This is something experts have been quoted about trying to improve for some time. By proving that the value of your product is worth the cost, you’ll be saving the customer from needing to worry about overspending. This is why customers will often conduct their own research before purchasing a product.
Everyone wants to make sure that their money is being well-spent, so if it’s possible for you to put their mind at ease and prove that your services are worth their cost, then do it. This will help dispel their need to go digging for other options and encourage them to trust you with their business.
An easy way to prove your worth is to simply provide better quality than the competition. This doesn't have to come at more of a cost to you either; it may just mean providing better service where it matters. A consultant can research what matters most during an interaction between customer and company and help you focus your time and efforts on strengthening the front-facing factors that are making or breaking future sales.
4) Improve Experience
This could include everything from the way your site is designed, to the way that products get delivered. Improving the quality of service overall will leave a lasting impression on the customer that can keep your company top-of-mind.
Many successful app developers are taking advantage of this business strategy. An app can be an easy fix to a problem, so identifying problems we run into each day and finding a way to improve that experience can go a long way in earning the business of consumers.
Before digital GPS became so prevalent in just about every smartphone, people were sick of using separate devices or pulling wrinkled maps out of the glove compartment. Now, the constant improvement and accessibility of the GPS are what keeps the top GPS app developers on their toes, as their entire industry is now micro-focused on improving the user experience.
The ability to improve experience should be a required factor in just about every technological advancement. Be sure to consider what tools in your personal toolbox help improve your audience’s overall experience with your brand.
Rise Above The Crowd
Don’t wait to get strategizing! The sooner you start to experiment with business strategy, the sooner you’ll grab the attention of new buyers who have yet to hear of your services. Trial and error will always be part of finding the best strategy that combines all the factors you need to succeed. By starting with an experienced consultant, you’ll be able to cut past much of the time spent on initial testing and move straight into addressing the real roadblocks that need your attention.