How To Define Your Competitive Advantage and Strengthen Your Brand Strategy

>> Hi. Welcome back.

Thanks for watching
this video.

I want to talk
to you about

the seven strategies that

you can use to define

your competitive
advantage.

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So what's the definition

of a competitive
advantage?

A competitive advantage is

the ability to stay

ahead of the present

or the potential
competition.

And so, how do
you do that?

You do it by evaluating
the strengths and

weaknesses of
the competition,

and then you see
where you can

fill in the gaps or step

up and improve in order

to take advantage
of that difference.

You develop a competitive

advantage when you develop

attributes that allow you

to outperform
your competition.

Now, let's talk

about seven strategies
that you can

use to establish this
competitive advantage.

Number 1 is a
pricing strategy.

Competing on price
is not always

the best way to go about

establishing a
competitive advantage.

And the reason
why I say that

is because when you
compete on price,

low price in particular,

you have to sell
a whole lot

of products or
a whole lot of

your services in
order to make

any money and in

order to beat
your competition.

You have to sell
a lot of them

because when you
compete on price,

your profit margin around

what you're selling
is very low,

so you have to
sell a whole lot

of them in order to be

successful and even more

to beat out your
competition.

So companies that
compete on price

are generally the larger
companies out there,

companies like Walmart or

Amazon or the
fashion company H&M.

These sorts of very large

companies compete
on price,

but they have to
sell a whole lot

and sometimes takes
years and years to

even gain profitability in

order to succeed on
competing on price.

Strategy number 2 is

an operational
excellence strategy.

There are markets that
are really crowded.

Let's take, for example,

the package
delivery market.

There are companies
that compete in

this market like
FedEx and DHL,

United States Postal
Service, and UPS.

These companies
are set up so

they have efficient
systems and

processes that allow
them to deliver

their packages in an

incredibly efficient way.

And the more
efficient they are,

the more customers
are going to

use them over
their competition.

So, for instance, FedEx,

when they came into
the marketplace,

were incredibly
efficient and

were delivering
things overnight,

where the United States
Postal Service was

taking weeks sometimes
to deliver packages,

so the United States
Postal Service had to

get really good and up

their game in order
to compete with

the FedExes and the DHLs

of the world. When
you compete with

an operational
excellence strategy,

you have to have in place

an incredible way to

gather data and
analytics and how

you're delivering your

products and
your services.

For instance, the fast
fashion company, Zara,

goes from concept to
in-store in six weeks.

Zara goes to Paris
runway shows,

and they look at what
the new fashion is.

They'll then
knock off or do

versions of what that
new fashion idea is.

They will take it
through sampling

production and get it
in store in six weeks.

It's an incredibly
fast timeline for

that company and beats

anybody else in the
fashion industry.

They compete on an

operational
excellence strategy.

They get new concepts
and new designs

to market faster
than anybody else,

so their customers will

know that the stuff
they're getting in

their store is
about as hip and

cool and current
as it can be,

and everyone else is
getting their products

in store six months
to a year later.

Another example
of an operational

excellence
strategy is Ford.

Now, this is an
older example,

but when Ford invented
the assembly line,

that was a massive

operational excellence
strategy win.

Up until then, cars had

been assembled in
a single place,

and all of the workers

would come in
with the parts

and build a car in
a single place.

When Ford developed
the assembly line,

the worker would
stand still

with a whole
pile of parts,

and as the car
came by them,

they would add their
part to the car

until the end of
the assembly line,

the car would be done.

Now, today, 100
years later,

we're like, "Everybody
does that."

But at the beginning, that

was an amazing invention,

and it catapulted
forward to

the top of the
industry because

of that operational
excellence.

Now, number 3 is an
innovation strategy.

Companies that can bring

new innovations and

brand new products
and services

to market faster
than anybody

else have a distinct
competitive advantage.

Some examples of
companies like

this are Apple
with a smartphone,

which revolutionized
the technology market

and modern life, arguably.

Tesla, who brought

battery technology
and electric cars

to the consumer market,

or companies like 3M that

has done massive
innovations in

the office supply space

with products like
Post-it notes.

You can also be first

but not necessarily
better.

Being innovative
and inventing

new things doesn't always

guarantee that
you're going to win.

Some examples of this are

Sony who developed
the Sony Betamax,

which was not a VHS tape.

It was a different
format, but it was

the first one. It
was more expensive.

And the VHS format tape

radically overtook
the Betamax tape

in a very short
period of time.

So Sony was first,

but they didn't
end up winning.

Other examples of
this are Xerox.

Xerox developed the
graphic user interface,

so the basic concept

of a desktop on
your computer.

Xerox developed
this concept,

but it was quickly
usurped and stolen by

Apple and Microsoft, who

brought it to market
in their computers.

So Xerox developed
the technology,

they innovated it, but

they didn't really
end up winning.

Now, failing to
innovate can

also be the death
of a company.

There are companies
like Kodak

and Blockbuster Video, who

failed to innovate when

new innovations came to

their category
or their space,

and by sticking with

their guns and what
they used to do,

keep doing what
they always did,

they ended up losing

market share and failing
in the marketplace.

Kodak owned cameras
and owned film.

They entirely owned
the category,

but when digital
photography came

to the camera market and
the camera category,

Kodak refused to get
on board with it.

They were more
perfectly positioned

to win in that category
than anybody else,

and they decided to
stick with film,

and it really decimated
their business.

Number 4 is the

technological
advantage strategy.

Now, this could be using
brand new technology

or it could be using
existing technology,

but in a brand new way.

Companies like this
that have succeeded

with this competitive
advantage

are companies like Ford,

with their assembly line,

as I mentioned before,

or Apple with their
ease of use and

the graphic user interface

that they got from Xerox.

Or Netflix in
delivering video first

on DVD through
the mail and

then through
streaming services.

Companies like Square

that have revolutionized

how easy it is to

process credit
card transactions.

And they took it from
a physical experience

in a retail store to

a very quick stripe

that you could do
on a smartphone and

do it over Wi-Fi
or do it over

cellular actually to
complete a transaction.

Number 5 is the
differentiation strategy.

And I love the
differentiation strategy

because you don't
necessarily have

to have radically
better products or

services to gain
an advantage

over your competition.

What you have to do is you

have to differentiate
yourself

in how you do it or how

you look when
you're doing.

Some examples of this
are like Old Spice.

Old Spice was like
your dad's aftershave.

It was very old
archaic aftershave.

And they came
to market with

a brand new advertising
strategy, new packaging.

They kept the same bottle

because it was
very iconic,

but they took a very

wacky, very unique, funny,

comedic approach
to marketing

their aftershave with

the manliness
advertising campaign,

which I'm sure you're
familiar with.

Companies like
GEICO that deliver

something that's
fairly boring,

car insurance or
house insurance,

and they delivered
it with a mascot,

the GEICO Gecko or
the GEICO Caveman,

or any number of
other characters

and techniques
that they've used

to deliver a very weird
and unexpected way

of positioning
and marketing,

communicating the service
that they provide.

Other great example
is the VW Beetle.

The VW Beetle, when
it came out in

Germany around the
time of World War II

was incredibly different
and incredibly unique.

Its shape was absolutely

different. It
was lightweight.

Its motor was in the
back of the car.

It was easily
maintainable by the user.

It was completely
antithetical to

the giant gas-guzzling

heavy automobiles
of the time.

And it maintained that

differentiation
by maintaining it

consistently across
time and became

an iconic product in

the marketplace and
incredibly differentiated.

Number 6 is an
information strategy

using information as a
competitive advantage.

And the example I'm going

to use for this
is Walmart.

Walmart passes
information around

its product
manufacturers and

delivery distribution
centers in

an incredibly
efficient way.

If a hurricane is coming

into Florida, and
they know that

there's going to
be a need for

hurricane assistance
type of materials,

things like tarps
and water and

gasoline and generators
and things like that,

they will inundate

their Florida stores
with those sort of

products because they have

the information of
what's going to

happen in that
geographic location,

and they use that
information to adjust

how they're
delivering products

around their
network of stores.

So that's using
information

as a competitive
advantage.

Number 7 is the
adaptability strategy,

and I love this
one because

adaptability is probably

the most important
strategy in

the marketplace
today because

the marketplace
is changing

at such an
accelerated rate.

Being adaptable
in what you're

doing, how
you're doing it,

the products and services

you're delivering
is critically

important to
being competitive

and winning over
your competition.

Here's a great example.

Limited brands

that owns
Abercrombie & Fitch,

very early on in
their development,

decided they were never

going to have more than

I think it was
about 700 stores.

Take in comparison,
Gap Inc.,

which has thousands and
thousands of stores.

When Gap Inc. wants

to change something
in its stores,

it's an incredibly
huge investment

and takes a long
period of time to

change just the smallest

retail fixture
in a store or

one particular
product line

or one particular display.

Abercrombie, on
the other hand,

with a limited number
of stores can move

very quickly and implement
changes very fast.

So that adaptability,

that nimbleness
really gives

Abercrombie and the
limited brands and

their smaller retail lines

a distinct competitive
advantage.

Netflix is another
example of this.

They moved from
delivering DVDs to

streaming content and now

developing their own
original content.

So their adaptability to

the market from delivering

DVDs in a very unique way

to then streaming
digitally movies to

people to then developing
their own content,

as well as streaming, as

well as delivering DVDs,

and expanding
their offering was

incredibly adaptable to
changes in the market.

An additional key point

to make here is
that companies that

help other
companies adapt and

change can be very
successful by

leveraging an adaptability

strategy or the importance

of an adaptability
strategy

to build their businesses.

An example of this are
consulting companies

like Boston
Consulting Group

or Bain or McKinsey,

who are large consulting
companies that

help companies
make changes

or be adaptable
in the market

so they can compete

against their competition.

So if you have a
branding agency or

a design firm or you're

a freelancer and
a company of one,

you are also, if
you think about it,

in the business of

helping companies
be adaptable.

You're helping
companies change,

so you are essentially

leveraging an adaptability
strategy to build

your business
because that's

what you're pushing
out and helping

your clients do
in order for

them to win and be
competitive in the market.

So thanks so much for
watching this video on

seven strategies
you can use

to define your
competitive advantage.

And if you like
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And if you need help

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at philipvandusen.com.

I'd love to talk to you
about your challenges

and help you get
to the next level.

And with that, thanks
again for watching.

Bye for now.

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