Competitive Advantage is an important thing to know about your product or service and to be able to articulate to investors. This is important when looking for federal funding such as Small Business Innovation Research (SBIR) as well as when pitching to venture capital organizations or angel investors. Having a strong competitive advantage is important because it sets you apart from competitor products and services.
Types of Competitive Advantage
There are many ways a company can gain an advantage over market competitors. One of these ways is through brand recognition. A great example of the competitive advantage of brand recognition can be found in the electronics sector.
Proprietary Technology is another great way to gain a competitive advantage. Having a product feature no one has had developed yet is a great way to stand out from the crowd. Resources are a great way to gain an advantage as well. Access to natural resources competitors lack can differentiate your product from others. A great example is the Fiji water company, the only water company with access to an artesian aquifer on the island of Fiji. You can also gain an advantage by offering better service or a lower price than your competitors.
How to Keep Competitive Advantage
Once you develop a competitive advantage, be sure to keep it. If you have an innovative technology, patent, or copyright it to retain intellectual property rights. If you have access to a unique natural resource, be sure to find a way to keep that resource protected and out of the hands of competitors. It is also important to know what your competitors are doing. After all, how can you surpass them if you do not know their company and product? Advertising is an important way to gain brand recognition that will protect your competitive advantage.
Competitive advantage is an important concept for anyone who intends to sell a product, innovation, service, or idea. Before you pitch to investors or respond to any grant solicitations, be sure you know what your competitive advantage is and how to keep it. Investors both federal and private want to know they are putting their money behind a winning concept that has the potential to surpass market rivals in terms of sales and profit. If you do not know your competitive advantage, how can you prove to investors that your product will be successful?
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