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A sustainable competitive advantage is a long-term strategy that enables a company to stay ahead of its competitors. It can be built into the fabric of a business and requires dedicated effort, innovation, and luck. Sources of sustainable competitive advantage include patents, talented employees, customer service, and market research.
A sustainable competitive advantage is a long-term strategy or process that enables a company to stay ahead of its competitors. Unlike short-term advantages, such as being first to market with a new type of product, a sustainable competitive advantage can be built into the fabric of a business and will help maintain its dominance for years and even decades. Developing such an edge often requires dedicated effort, the ability to constantly innovate, and even a little bit of luck.
One of the most likely sources of sustainable competitive advantage is ownership of a patent or trademark. Patents only allow the owner to create and license a particular product, which means that customers can only purchase it from the original source or authorized distributors. One of the keys to making a patent a sustainable advantage, however, is the inability of competitors to closely imitate the product with similar, even if not infringing, versions.
The people who work in a company can be as important to creating a sustainable competitive advantage as the products that the company creates. Being able to attract and retain the best minds in the field is a surefire way to create a creative and innovative environment that can benefit every part of the business. By creating a work environment that stimulates and interests workers, a company not only benefits from their best skills, but also prevents competitors from having access to the same people.
How the company treats the customer can help create a sustainable competitive advantage that expands customer retention and creates lifelong consumers. In addition to offering great customer service, a company can develop this advantage by considering the customer’s convenience in all decisions. For example, locating storefronts in an easily accessible central area with sufficient parking can consistently attract more customers. Having a wide range of products, offering customer incentives like rewards cards, and making returns and exchanges easy can also help develop a strong consumer base.
To sustain an advantage, a company must be able to read the market correctly and move with the times. Many successful companies view market research and component product development as vital to the business and rely on research and development to provide the direction and innovation to propel the company’s success into the next generation. Even at a small business level, understanding the changing trends in fashion, technology, and social awareness can help direct future production.
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