In order to define your real value proposition and competitive advantage, you need to know. “What value is my business offering? and, What makes my business unique?” To be successful, a business must be offering value to their customers. Preferably in unique ways that are appreciated by its users. The value proposition defines the problems you solve. Who will benefit from the solution and How they will derive the benefits.
Even if you are in a unique position of having a monopoly in what you offer, competition is inevitable and sooner rather than later, your business will have competitors trying to outdo you and gain market share.
To remain competitive: a business must find its competitive advantages. Therefore, it is critical to maintain and share those unique differences with their market. Competitive advantages come in various modes, whether its lower costs, faster delivery, niche segment, better quality, enhanced product features, etc. They set businesses apart and give it its identifying characteristics. Over time, both the reason for being and the unique advantages may change dependent on market demand internal capabilities, however, it is imperative that a business stays relevant to ensure sustainability.
To verify both the value proposition and the competitive advantages, it is useful to conduct Customer Satisfaction Surveys which are a simple way to establish what customer/user perceives to make the difference These should be implemented on a regular basis as part of the business policies.
Answers to these questions will highlight the value proposition:
- What problem are we solving?
- How do we solve the problems?
- Why should people buy our solution?
- Who is the typical buyer of our solution?
Once you have answered these questions, it is advisable to consult your team for their opinion. Customers are a great source of information in this regard.
Your competitive advantage:
By using a SWOT quadrant, a business is able to assess competitive differences. Use this to make the necessary improvements to ensure sustainability.
This exercise should also be done in a group session with your team members.
At the end of the exercise, you should have your value proposition and competitive advantage. Validate your results with other stakeholders, such as colleagues, customers and suppliers.