9 Tips to Develop Your Sustainable Competitive Advantage

Success isn’t possible without building a sustainable competitive advantage and protecting that advantage through constant vigilance. When starting a business, you likely find it difficult to help your brand stand out from the competition. There are so many businesses out there, all competing for the same customers. How do you make sure that your business is the one people choose when it comes time to make a purchase? That’s where the concept of sustainable competitive advantage comes in. When you’re business offers something consumers care about; something not available through your competition, they choose your business. You now have a market all to yourself and can grow your business. This blog post discusses tips that help you develop a sustainable competitive advantage so you attract more customers!

sustainable competitive advantage

What is sustainable competitive advantage?

In the image above, we see a depiction of sustainable competitive advantage with the lead competitor rolling a wheel that quickly outpaces the competition that is forced to slide a much wieldier cube. That’s the concept of competitive advantage where your job is easier and you can leave your competition in the dust.

Let’s parse this important concept. First, what is competitive advantage? A competitive advantage arises when you provide something valuable to consumers that isn’t available from your competitors. Offering your product at a lower price is what most entrepreneurs and business owners consider first when thinking about how they can stand out from the competition. This aligns with an economic view of consumers as utility maximizers but doesn’t mesh with reality where the price isn’t always the most important feature consumers consider when making a purchase decision. All you have to do is investigate the success of the iPhone, arguably the most expensive mobile device in most markets, to see an example that proves the falsehood of the economic notion of consumer decision-making. I could name thousands of examples where a lower price wasn’t the major driver of business success. It’s this notion that supports the rationale for spending money to brand products  (in fact, marketing was born out of the inability of economics to offer insights into consumer behavior). Most consumers make a purchase decision based on perceptions of the value offered by the product rather than its price.

In fact, a Forbes article shows that, in a real-world case, an increase of 25% in the price of a product caused a drop in sales volume of only 8%, thus increasing the revenue generated significantly. That’s because consumers still saw great value in the product even at the higher price and continued buying it. Below, we see factors that allow a firm to demonstrate the value they offer to customers. By optimizing this value, you offer a competitive advantage that helps you acquire new customers and keep existing ones.

consumers choose value

Above, we see the factors consumers consider in attributing value to a product. Each of these factors provides a competitive advantage when consumers view the value bundle you offer as superior to the bundle offered by other available products.

Sustainable competitive advantage comes when you can continue providing this value over time. That’s another reason why the price is a poor choice when searching for a rationale consumers can use to make the decision to purchase your product. It’s easily copied and, over time, the company that can sustain lower profits or losses over time wins the race to the bottom when it comes to competing on price.

How to build a sustainable competitive advantage

1. Know your competition

It’s important that you objectively evaluate your competitors and what they offering to understand ways to develop and sustain a competitive advantage over them. Take some time to research your industry to understand how it operates, its strengths and weaknesses, and what you can offer your target market that your competition can’t. This helps you identify ways you can make your own business stand out.

2. Know your target market

By the same token, you must develop a deep understanding of your target market. That means understanding:

  • the problems they face; consumers buy solutions not products
  • what’s important to them
  • how they view the world
  • what factors influence their buying decisions, we talk about hot buttons, which are the most important variables influencing decisions
  • how they express their needs
  • who they respect and follow

You can’t armchair quarterback this understanding of your target market. You need data to flesh out who your customers and prospects are. This data might come from internal data, such as sales, website clickstream data, etc, or external data from interviews, listening on social media, experiments, etc.

3. Anticipate the future

No one has a crystal ball when it comes to anticipating the future but you can get a good idea of how things might change in the near future through research like:

  • investigations of cultural change through mass media, social media, and pop culture
  • who are your competitors in the future? Porter’s 5-forces model (see below) offers a systematic way of what competition might look like for your business

    porter's five forces
    Image courtesy of Oxford
  • a program of environmental scanning of factors impacting your success

4. Offer something unique

One way to make sure that people choose your business over the competition is to offer something that they can’t get anywhere else. If you can offer something that sets you apart from the rest, you develop a sustainable competitive advantage. Listening on social media is a great way to uncover unmet needs. Although it predates social platforms, the Chrysler minivan is a great example of a successful new product that filled an unmet need for families who needed more passenger space but didn’t want to drive something built on a truck chassis that was harder to drive. By observing how real families used transportation, Chrysler developed one of the most profitable new car models in history.

Hence, you need something unique that fills a customer’s need or does it better than existing options for solving their problem.

5. Effective marketing

Once you’ve identified what makes your business unique, it’s time to start promoting it! Get the word out there about your brand and what you have to offer. The notion that “if you build a better mousetrap the world will beat a path to your door” is hogwash. You must create awareness of your product and then convince them your product is, in fact, better. Use marketing and advertising techniques to reach potential customers and let them know why they should choose your business.

Building a brand personality that encourages your target market to choose your brand is important as consumers want a product that fits their personality. Get a Startup logo that helps support your brand identity and personality using the archetype wheel shown below as a guide.

the right brand personality
Image courtesy of Sketch Corp

Another thing that you can do to make your business stand out is to keep your image fresh and up-to-date with changes in what’s important to your target market. Regularly update your website, social media accounts, and marketing materials to make sure they resonate with your target market and what’s important to them. This helps consumers see how your brand is a good fit for them.

Currently, consumers, especially younger ones, want to support a brand that shares values important to them. That’s the reason why Nike cut ties with Ye after his antisemitic rant despite losing $250 million in sales of his shoe. The company stood to lose much more than this in sales if customers boycotted its other products over the company’s association with Ye.

6. Keep your customers happy

It’s important to keep your existing customers happy. In fact, a reputation for stellar customer service is one of the best options for building a sustainable competitive advantage as it takes years for a competitor to match your reputation. When you provide customers with the high-quality goods and services they expect, you build a reputation through word of mouth, reviews, and recommendations that bring new customers flocking to your brand. If you can keep your customers satisfied, you retain your customers over the long run and retaining existing customers is 5X less expensive than replacing them.

7. Get involved in your community

Finally, one great way to build a sustainable competitive advantage is to get involved in your local community and even the broader community as your business grows beyond the local area. Show people that you care about more than just making money by supporting causes, charities, and events. This makes people more likely to support your business and recommend it to others.

Consumers want companies to demonstrate their corporate social responsibility (CSR for short) through their actions. This includes acting ethically both internally in dealing with suppliers and employees, using sustainable business practices such as reducing waste and conserving natural resources, and being responsive to customers’ values, such as offering sustainably grown local vegetables (often touted as farm-to-table) in your restaurant.

corporate social responsibility
Image courtesy of Involve Soft

8. Offer a better price

OK, so I know we started this discussion by showing that price isn’t a viable option for building sustainable competitive advantage. But, that’s only part of the story. In fact, you can build an advantage that’s sustainable when your lower price is a function of lower costs. For instance, Airbnb offers many more rooms than its next closest competitor because they have few, if any, fixed costs. They don’t own hotels with expenses for mortgage and upkeep. They turned the industry on its head and can offer more than a hotel for a lower price. Same with Uber.

Walmart also offers a lower cost than many other retail chains due to the massive volume it purchases from suppliers, which allows it to negotiate a lower cost than other firms.

9. Consistency

The key to building and maintaining your competitive advantage is consistency. Ensure you have a clear message that resonates with your target market and then promote that message with everything you do from your marketing to your storefront to the people you hire. Everyone and everything must reinforce your brand to demonstrate how it fits with your target market.


There are many ways to build a sustainable competitive advantage that helps your business profits and leads to business growth. In this post, we shared 7 tips to help you build a sustainable competitive advantage. If you follow these tips, you’ll be sure to make your business a success!

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