“Our new product will give us a real competitive advantage! It is of high quality! It solves a real customer problem and is a result of our constant innovation focus.”

It is easy to get excited about a new product launch. After all the blood, sweat and tears it might have cost you to develop your new product, you simply know that it is going to be a success. Many people recognise the feeling, albeit from a real product launch or even from baking a cake of this new recipe; “our guests will simply find this the best cake in the world”. It is the same principle. We are deeply involved into the making or development and get a bit carried away with our enthusiasm for the product.

However, the actual result of your product launch is to a large extent depending on the product´s competitive advantage compared to other products. Competitive is a relative concept. All the advantages named above are absolute parameters and they say nothing about your competitive advantage. Customers always have a choice between your product or those of any of the competitors. And there is another choice which is often overlooked. Customers can decided NOT to buy any product, simply because the need or benefit is not strong enough for them!

So what is real competitive advantage? Competitive advantage is entirely a function of where you are BETTER, FASTER and/or CHEAPER relative to your competitors. That´s it. Those three advantages (or disadvantages) will be the key decision points for most of your customers. There are exceptions, think of brand loyalty and customer stickiness, but the question is how sustainable those are in the long-term? Sooner or later, your customer might be looking at better, faster, cheaper again.

Improving your competitive advantage is not easy. It requires you to look at your internal business processes and compare those with those of your competitors. I will tackle this in another blog post. First, we should have focus on the customer´s perspective. Always! It requires hard work to continuously know what your customers are expecting and thinking about your product. Always use opportunities to get as much customer feedback as possible and try to align your offering with your customers. Sometimes a small tweak in the product or service is enough. Also consider the whole purchase and consumption cycle. Perhaps the purchase process can be improved or even the way one could dispose of a used product. Be creative! Listen to your customers! Scrutinise how the competition is operating. And never stop this process, as change is constant. Customer’s needs and preferences change, competition is also trying to improve their competitive advantage and new competitors could enter your market. And of course, radical changes in technology have had major impact on industries, markets and companies before.

However, it is surely not impossible to improve and sustain competitive advantage. It just requires some blood, sweat and tears, just like developing your product or baking that wonderful cake!