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23 Examples of Competitive Differentiation

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Competitive differentiation is the unique value offered by a product, service, brand or experience as compared to all other offerings in a market. Where this matches customer needs, competitive differentiation may make it possible to achieve market share in a competitive market. Ideally, competitive differentiation is difficult for your competition to match due to your unique competitive advantages. The following are illustrative examples of competitive differentiation.

Quality

Superior quality such as the hotel with the most comfortable and visually stunning decor in all of central Paris.

Style

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.

Culture

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.

Distinctive Capability

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.

Talent

Superior talent such as an architectural firm filled with award winning architects.

Relational Capital

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.

Usability

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

Locations such as the only restaurant in a luxury hotel.

Convenience

Convenience such as an ecommerce company with faster delivery and more service locations than the competition.

Performance

The performance of products and services such as running shoes that are unusually bouncy and easy on the knees.

Speed

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.

Safety

Being safer than all other competition such as a car that has superior crash test results and an exceptional real world safety record.

Health

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.

Risk

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.

Privacy

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.

Configurability

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.

Compatibility

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.

Efficiency

A product or service that uses less resources such as an electric bicycle that can travel extreme distances on a single charge.

Price

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.

Durability

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.

Customer Service

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.

Network Effect

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.

Sustainability

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.
Overview: Competitive Differentiation
Type
Definition
The unique value offered by a product, service, brand or experience as compared to all other offerings in a market.
Related Concepts

Competitive Advantage

This is the complete list of articles we have written about competitive advantage.
Absolute Advantage
Bargaining Power
Barriers To Entry
Brand
Business Cluster
Business Scale
Business Strengths
Capital
Competitive Differentiation
Competitive Parity
Competitive Pressure
Competitive Strategy
Cost Advantage
Cost Innovation
Cost Strategy
Critical Mass
Customer Satisfaction
Design
Digital Maturity
Distinctive Capability
Distribution
Economic Advantage
Economies Of Density
Economies Of Scale
Economies Of Scope
Experience Economy
Information Advantage
Information Asymmetry
Know-how
Market Position
Market Power
Marketability
More With Less
Network Effect
Organizational Culture
Price Leadership
Product Development
Productivity
Relational Capital
Relative Advantage
Risk Management
Strategic Advantage
Switching Barriers
Switching Costs
Trade Secrets
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Competitive Advantage

A few sources of competitive advantage for businesses.

Business Value

The definition of business value with examples.

Information Advantage

The definition of information advantage with examples.

Strategic Advantage

The definition of strategic advantage with examples.

SWOT Strengths

An overview of strengths in SWOT analysis with examples.

Business Weaknesses

A list of business weaknesses for strategic planning exercises such as swot analysis.

Business Strengths

A list of business strengths for brainstorming activities such as swot analysis.

Cost Innovation

The definition of cost innovation with examples.

Customer Value

A complete overview of customer value with examples.

Competitive Disadvantage

A few examples of a competitive disadvantage.

Competitive Disadvantage Definition

A definition of competitive disadvantage.

Diseconomies Of Scale

Disadvantages faced by large organizations such as bureaucracy.

Competitive Threat

The common types of competitive threat.

SWOT Weaknesses

An overview of SWOT weaknesses with examples.

Opportunity

An overview of opportunity with examples.

Business Attributes

A list of common business attributes.

Situation Analysis

An overview of situation analysis with examples.

Contingency Theory

An overview of contingency theory with examples.

Business SWOT

A list of business strengths, weaknesses, opportunities and threats.

Business Context

An overview of business context with examples.

Competitive Parity

The definition of competitive parity with examples.
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