Differentiated Strategy: How to Build Competitive Advantage?
What is a Differentiated Strategy?
A strategy which is focused on boosting the presence of a business within a marketplace and highlight the things that make it different from similar competitors is called as a differentiation strategy. A well-executed differentiation strategy helps your business to stand out in a competitive marketplace and convince potential customers to buy from you, rather than engaging competitors.
If you want to create an effective differentiation strategy, it’s necessary to explore and assess similar businesses that work in the same marketplace and identify those that provide similar products and services. It’s possible to identify the key elements that make your business different from your competitors is by evaluating the common factors shared by your competitors.
Ways to differentiate
|1||Product Differentiation||Features I Performance I Efficacy Conformance I
Durability I Reliability I Warranty
|2||Service differentiation||Ordering Ease I Delivery I Installation Customer
Training I Customer Consulting I
Other miscellaneous services
|3||Channel differentiation||Coverage I Expertise I Performance|
|4||Relationship differentiation||Competence I Courtesy I Credibility Reliability I
Responsiveness I Communication
|5||Reputation/image differentiation||Perception I Communication Advertising|
|6||Price differentiation||By Customer I By Quantity By Segment|
Factors to consider while building a differentiation strategy
There are many factors that make your business stand out in the marketplace. Business differentiators may take the shape of product specifications, service offerings, features or efficacy, or pricing. Whereas, marketing and branding differentiators can take a form of business naming, visual identity, or the verbal identity of a brand and the message it delivers.
The most important factor to consider while building a differentiation strategy is whether or not the differentiators you choose to feature deliver value to your potential customers. It’s important to put it out on the display that your brand delivers greater value and higher quality than your competitors. This can be done through the visual identity presented within your branding, the customer experiences your business delivers and the features that your products or services provided.
What does your differentiation strategy require?
After establishing the key factors that make your business different from others, it’s possible to build a basic framework for executing your differentiation strategy.
1. Research beforehand
Conduct complete research about how your competitors differentiate their businesses from others. This will help you in matching your differentiation strategy with the preferences of potential customers.
2. Primary differentiator
The primary differentiator of your business should display a relevant demonstration of the value you’re able to deliver to your customers that your competitors can’t.
3. Focus on your primary differentiator
You might have made a list of multiple differentiators that you can use to distinguish your brand from the competition. Regardless of how many differentiators you choose to include in your differentiation strategy, it’s important to focus on your primary differentiator, placed alongside supporting differentiators.
4. Tell a story to your customers
Communicating a brand story to your customers is one of the best and most effective ways of highlighting what makes your business different. Start with your company website as it is a great place to showcase your brand story via blogs, social media updates, and the “about” section of your website. They are a highly visible platform for communicating your brand personality.
5. Connect with your audience
The most important element of any successful differentiation strategy is sharing the things that make your brand unique.
Advantages of differentiated strategy do for your business
Differentiating your company from competitors is important for long term success and sustainable growth of your business. Whether it is a small local business or a well-established MNC, every business requires a strong differentiation strategy to gain a competitive edge in the marketplaces.
An effective differentiated strategy has the following advantages to your business:
- It can highlight the value of your company through price, ethical drive, customer service, and many other aspects
- It helps in communicating the unique selling proposition offered by your business to customers and demonstrated to potential customers that your solution is unique
- It also improves customer retention and brand loyalty
Building an effective brand strategy can require an in-depth assessment of your business and careful planning. Do complete research before taking any decisions or take help from a reliable business mentor.