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Competitive advantage is defined as the long-term plan where a company seeks to gain an advantage over its competitors. 

It aims to create a defensive position in an industry and generate a superior ROI. 

This type of strategy plays a very important role when consumers are in constant contact with almost similar products. For example, the mobile phone sector. 

According to the economist and professor at Harvard University, Michael Porter, in 1985 he presented this concept which is still valid in the business world.

Types of competitive advantages (according to Porter).


Porter Competitive Strategy

According to the economist, there are 3 different types of competitive advantages:

  • Leadership in low costs

The objective of this type of strategy is that the company wants to become the lowest cost producer in the sector and it does this by producing on a large scale, in order to have a gradual economy. 

High negotiating skills and the use of state-of-the-art technology are some of the factors needed to achieve this type of leadership.

  • Strategy of differentiation

Here a company maintains unique characteristics of its products in the market, thus creating a differentiation factor. 

This type of tactic is intended to achieve relevance in a specific sector and businesses charge a higher price for products (due to the high value-added characteristics). 

Its brand, its quality, its main distribution channels, its constant promotional support, etc. are some of the attributes that are taken into account.

  • Focus or segmentation tactics

This type of strategy has to do with the target audience of a product or service. With this strategy, a company focuses on satisfying well-defined segments according to the type of population, location, or their consumption habits. 

For example, a business focuses on specific market segments and keeps its products low cost. What helps is to satisfy consumers and gain popularity. 

On the other hand, a company that seeks to differentiate between one or two competitors, focusing on specific segments. 

This type of differentiation is made to meet the demands of customers who refrain from buying competing products only for lack of small features. In itself, it is a clear niche marketing strategy.

Every competitive advantage needs an analysis beforehand to be efficient.

Before establishing your strategies, it is key that you make an analysis of the competition. 

In this article, we refer to the fact that there are two main stages to be taken into account when doing so:

  • Identify the value that your competition gives in the sector
  • And examine their market share

Well, after you've done your analysis, it's time to periodically check on your competition. 

Not only will it help you predict their next moves, but it will also give you some valuable insights into future changes to your products or services, team scaling, investments and other ideas that can be very important in creating different competitive advantages. 

Some topics you can monitor your competition may be:

  • Changes to your website
  • Newsletters
  • Product changes and special offers
  • Social Networks
  • Keywords and SEO
  • Publication of its contents
  • And advertising campaigns (Social Media, PPC, etc.).

After knowing your competitors, comes the competitive advantages. 

After you know who your competitors are, and know their next steps and have a vision of their strategies, it is time for you to take action and make good competitive tactics.

Some of the competitive advantages you can apply in your business.


  • Provide more value

You should always think and care about your current and potential customers. Sometimes, providing more value is what makes a decision in the eyes of customers to use one brand or another. 

What can help you is to write valuable articles on your blog, focused on helping your customers.

  • Build close relationships with your prospects and clients

This is one of our favourite competitive advantages. 

Creating personal relationships with your prospects will not only provide you with customers, it has something extra... They become your best competitive and marketing advantage as they will spread the word about how happy they are with your product or service.

  • It offers different payment models

It analyses which products or services are of great relevance and creates different packages. It's a great tactic because you open up a range of options and that can help you sell more to your customers.

Apply every competitive advantage, hand in hand with your CRM.

In summary, there are 3 different tactics to be relevant in your sector: give a good quality product, offer value and, above all, communicate with your client. 

The importance of developing a competitive advantage is that apart from identifying strengths and weaknesses of any company, it helps you to create specific and effective tactics to be relevant in your sector. 

It is clear that a CRM can help you in this strategic process because

  1. You can save all the information you get there (company contacts)
  2. You can edit and save all the documentation from the same tool, so that you don't lose any details
  3. Most importantly, you get your entire team to know what tactics you are implementing so that they can use them for either a presentation with a prospectus or much more

By the way, have you tried efficy? 

Learn more about

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