1. What is competitive landscape? 2. How do branding assume a successful role in shaping the competitive advantage of small business? 3. Small businesses seldom have budget in advertising. How do they advertise their brand?
Creating the Competitive Advantage for Small Business
During an economic crisis, small businesses are often the first victim. Due to limited resources, small businesses cannot sustain the operation of their business. If they cannot cover the fixed cost, entrepreneurs choose to throw in the towel and give up. However, some entrepreneurs are, though, with the ability to bounce back immediately. The key to their success is their ability to unlock the industry’s competitive landscape.
Previously we discussed Porter’s competitive advantage. Experts noticed that those small businesses that immediately recover and even thrive during and after the crisis understand the competitive landscape. These are the businesses that succeeded in pursuing a competitive strategy that falls in terms of providing the low-cost market product, differentiates their product over competitors, or used the focused approach.
For instance, Panda food delivery is not a “new” idea. Before the advent of the internet when people look for restaurants in the yellow pages of the telephone directory, the popular restaurant already had their food delivery services. Panda food delivery services only concentrated on delivering any food from any restaurant. It was a single business operation, specializing in food delivery services alone. As one of the first mover in the market, the company succeeded in branding their services.
Successful branding is a psychological game that succeeded in creating a mental map and images to the customers. For the customers, the images that the brand evokes in their mind generate a process of choosing the brand. Thus a successful brand is tough to quantify, although such success creates for the firm more revenues compared to unknown brands. As the brand gets more successful, the higher are the potential revenue it brings to the firm.
Being a district from competitors is critical for branding, though products are classified in the same category. For instance, the sportswear industry has very intense competition. Big brands such as Adidas, Nike, and Reebok have their R&D department closely coordinating with the marketing units. The bottom-line among these companies is to create a unique distinction in their production in terms of functional attributes. They hire popular and successful athletes to reinforce these functional attributes in the mind of their customers.
As uniquely as possible, an entrepreneur must create a positive information campaign for their product, which social media crate a significant role. This information is the primary reason for several entrepreneurs to exclusively allocate a certain amount of budget to hire bloggers to create a positive review of their product or service. Potential customers generate an impression for a brand based on the information encountered. Customers encode this information in their memories and associate this information with the brand. Thus during a purchase, customers retrieved this information to influence them in their final decision to buy the product finally or not.
Customers are trying to purchase a product always tried to recall information from the item. These are often based on their experience or knowledge passed to them. The information recalled is based on the advertisement, a story from a friend or relative, or even our mother nagging us to buy only the brand she preferred. Such information flow to all the nodes in the brain, which is responsible for decision –making until the brand pops into the mind, which the customer proceeds to purchase the product finally.
Therefore, for an entrepreneur, it is crucial to take a step towards the right direction that is to build an excellent reputation for the brand. To disregard one valid complaint from a customer can ruin the reputation of the business. The dissatisfied customer will tell their experience to at least five people close to them. The key to all successful businesses is brand reputation; it is the ultimate competitive advantage of small businesses.
During an economic crisis the small businesses are always hardest hit unless, managers understand the competitive landscape. Please explain
1. What is competitive landscape?
2. How do branding assume a successful role in shaping the competitive advantage of small business?
3. Small businesses seldom have budget in advertising. How do they advertise their brand?
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