Today’s marketplace is flooded with products and services and brands. It’s impossible to switch on your computer, your phone, your radio or your TV and not be bombarded by advertisements, but does that mean there’s no room for new ideas or companies?
Business analysts confirm that more new companies have been launched since the recession than during the boom years prior to 2008. This would suggest that despite the downturn in the economy people still have ideas and the enthusiasm to launch new products and services.
But are all of these ideas totally original? Of course not. There are no new ideas and in every marketplace, there are dozens of competitors. The key to success in a competitive marketplace is not to come up with an original idea but to know how to differentiate your product from that of your competitors.
Annabell Acton is an entrepreneur who launched the online service, Never Liked It Anyway, back in 2012. Her site caters to jilted brides and ex-girlfriends who want to sell of their once sentimental bridal gowns, jewelry or gifts.
Not long after she set up her site, she discovered a competitor site called ExBoyfriendJewelery.com, which did the same thing as her site. Did she crawl up into a ball and cry? Did she abandon her idea and resign herself to working for other people for the rest of her life?
Absolutely not. She sat down and figured out what made her service different from that of her competitor and realized that what made her service stand out was the cheeky and irreverent tone of her brand. She set to work amplifying this tone, making sure that her site became synonymous with its competitive advantage, its cheeky, sassy tone.
The truth is there are hundreds of online companies offering similar services but only a handful make their way through the quagmire to become household names. The top examples of these companies today are Amazon, Google and Apple.
Jeff Bezos, CEO of Amazon, says that from its inception, the goal of Amazon was to focus on the customer, to make life as convenient as possible for them, and not worry too much about the competitors because they didn’t pay the bills.
When the company launched the first Kindle in 2007, he was aware that he was effectively competing against a five-hundred-year-old industry and that it was going to be difficult to convince customers that his product was better.
So what did they do? They put all the emphasis on the convenience that a Kindle could offer; the availability of thousands of books; the ease of carrying it around; the ability of reading in the dark without disturbing anyone close by. The price or the originality of the product was rarely mentioned.
Bezos was also aware that books were not the only competition that the Kindle faced as it was also competing with video games, films and television, in effect any popular leisure pursuit. To differentiate itself here, Kindle emphasized the endless choice of ebooks available and their easy delivery.
Too many companies get obsessed with the actions and / or strategies of their competitors. While it’s good to know what the competition is up to, it does your brand no benefit to slavishly follow them because this has the effect of killing original thinking and innovation.
Bezos knew that the entertainment industry was awash with options but rather than try to compete with them directly, Kindle was sold as a personal companion, the entertainment console that can fit easily in a handbag or pocket, providing convenient reading on the train, in a restaurant or in bed.
When the iPad was launched, some predicted the death of the Kindle but Bezos maintained the same strategy and has nothing but praise for Apple iPad Reader, which he calls an amazing gadget that everyone should have.
However, it’s not a Kindle, which sole purpose is for reading books. In this way, Bezos is continually reinforcing the capabilities and convenience of Kindle, and differentiating it from its competitors.
Bombarded by advertisements.
Every time I open my Facebook account, I feel as if I am bombarded by advertisements.
Know how to differentiate your product
If you don’t know how to differentiate your product, it will be impossible to give it a competitive advantage.
Irreverent tone of her brand.
Rimmel make-up decided to use Kate Moss to promote their new product line because of the irreverent tone of her brand image.
It does your brand no benefit to slavishly follow them.
Your competitors may have some great strategies but it does your brand no benefit to slavishly follow them, instead your brand must find its own identity.
The entertainment industry was awash with options.
When Apple launched the iPad, they knew that the entertainment industry was awash with options but they were confident that their product could compete.
Top 5 Tips for Identifying Competitive Advantage
- Focus on the Differences
- Know your Competitors but Don’t Follow Them
- Strong Brand Voice
- Know your Customers
- Focus on Long-Term Goals