The 4E Strategies to Differentiate Your Business from Competitors

A competitive advantage differentiates a small business from its competitors.  A competitive advantage is a distinct combination of offerings that customers want and only you can uniquely provide.  In a world full of options, it makes you more attractive than your competition.  Some examples of factors that provide a competitive advantage are product quality, service reliability, and unique experiences (Megginson, Byrd, & Megginson, 2006).

Traditionally, small firms have attempted to develop competitive advantages and differentiation based on delivering your goods to customers better, cheaper, or faster.  The reality is that few small firms can compete in all of these areas and some may not be very effective due to their limited size and scale of operation.  Additionally, small firms will rarely win the price competition game and should not use it as a differentiation strategy (National Retail Federation, 2005).

Instead, small firms should look for non-traditional means of creating value, such as experiences, to compete against major discounters and chain operations.  Experiences can be a key competitive resource for small firms as they can be very unique, hard to copy, and difficult for larger firms to effectively deliver on a personal customer level.  In the case of experiences, size can be used to the small firm’s benefit as it allows for personalization, flexibility, and quick reaction - something not easily accomplished by the big guys!

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