How to create a sustainable competitive advantage

[tincho1492]

Searching for information about building unfair advantage, find this great post on a Q&A site for startups:

Capture your market fast

Create a large market share quickly so competitors will find it difficult to get customers. This works especially well when your product or service has network effects. However, it is not quite so easy to achieve as it sounds!


Create a brand

Brand loyalty and reputation will help customers stick with you rather than switch to a competitor. The iPhone is a classic example. There are more functional phones on the market but customers buy iPhones because of the Apple brand, image and reputation.


Register patents, trademarks or Intellectual property protection

All these things can be protection for your business, but only if you have the money to defend them in court. The other disadvantage of patents is that you have to spell out the details of your invention which are then accessible to everyone.


Have a trade secret

If you create a product, you can keep the ingredients (or some of them) secret. Think 11 secret herbs and spices or Coca Cola. You can do the same thing with business processes. Sometimes this is a better way to go than patents.


Create exclusivity with suppliers

Having an exclusive license to sell your suppliers product means that no one else can directly compete with you.


Create exclusivity with distributors

Have an agreement with retailers/wholesalers so they can’t sell any products that compete with yours. For example, most vending machines only sell drinks from one beverage manufacturer.


Government regulation

If you can get the government to pass legislation that mandates the use of your product/service, that is a huge advantage.


Access to scarce resources

You may have access to resources that others do not. Foe example, mining leases give materials companies the right to sole access to mineral deposits. Businesses that are a monopoly often have the same advantage. Having technical or other staff with specialist know how that is rare may be a barrier to your competitors – as long as you make it worthwhile for them to stay with you. The ability to borrow funds when others in your industry cannot can effectively stop others from entering. Access to a particular location or key contacts are other examples.

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Link: How to deal with easily copyable idea? - OnStartups Beta - Stack Exchange

 

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