Competitive differentiation refers to the unique value that a company’s product, service, brand, or experience offers in comparison to all other offerings in the market. When a company’s competitive differentiation aligns with customer needs, it can help the company gain market share in a competitive market. Ideally, a company’s competitive differentiation should be difficult for its competitors to match due to its unique competitive advantages. This can help the company stand out in the market and attract customers.
Superior quality such as the hotel with the most comfortable and visually stunning decor in all of central Paris.
Being more stylish than the competition in the eyes of a target market. For example, the ice skate brand that hockey players view as cool.
The culture surrounding a brand, product or service. For example, the ice skates that are viewed as a Canadian classic with much lore attached to them.
A distinctive capability is an ability to do something no other competitor can match. For example, the only industrial company in a nation that has the know-how to safely decommission a nuclear power plant.
Superior talent such as an architectural firm filled with award winning architects.
Relational capital such as the real estate agent who knows the most people in a market such that they can give you insights into each buyer, seller and agent.
A product or service that is more pleasing and productive to use may have an advantage over the competition. This is particularly true in product categories where users spend a lot of time using the product such as a television, mobile device or vehicle.
Locations such as the only restaurant in a luxury hotel.
Convenience such as a company with faster delivery and more service locations than the competition.
The performance of products and services such as running shoes that are unusually bouncy and easy on the knees.
Being faster than the competition, such as a bank that does everything in real time in a country where competitors commonly take several business days to do most transactions.
Being safer than all other competition such as a car that has superior crash test results and an exceptional real world safety record.
A product or service that is perceived as more healthy than the competition. For example, a fast moving consumer goods company that uses no artificial ingredients in its products.
The ability to reduce or transfer a risk better than the competition. For example, a cloud platform that is known for its superior stability, reliability and availability that reduces business risks related to technology outages.
Products and services that do not collect or retain data as compared to the competition. For example, a vehicle safety system that only retains 20 seconds of video footage that never leaves the vehicle itself as opposed to a vehicle that collects and retains every moment permanently in the cloud to be shared with third parties.
Products and services that afford the user full control of their experience. For example, a microwave that allows customers who value quiet to turn off beeping sounds and customers who require notifications to turn them on.
Products and services that integrate with things. For example, a television that can automatically connect to a broad range of data storage devices with no configuration required.
A product or service that uses less resources such as an electric bicycle that can travel extreme distances on a single charge.
A lower price than the competition. For example, a solar panel company that offers the lowest prices on the market for solar panels at a reasonable level of quality. This typically requires a lower unit cost than the competition as a competitive advantage.
Offerings that are more durable in the face of stresses than the competition. For example, a house construction company known for its earthquake resistant designs and construction techniques.
Friendly and diligent customer service as compared to the competition. This can be a particularly strong competitive differentiation in an industry that is known for poor customer service.
Having more customers or users than the competition can be a significant advantage. For example, the most popular bar in a business district that consistently feels more socially lively than the competition.
The ability to deliver your products and services without hurting people or planet. For example, a drinking straw product that safely biodegrades within days such that it doesn’t add to the problem of ocean plastic.