Businesses have to rely on a variety of resources in order to function in their industry. Three of the most important however when put together helps a business establish its competitive advantage. The three most important resources in that perspective are it’s financial resources, enterprise knowledge and its human capital. If a business is lacking in anyone of these areas they risk losing their competitive advantage over rival businesses. If you want your business to have an edge over its competition here are some things you should know about each of these resources.
A business’s competitive advantage is the source of its ability to outperform its competition in one of more key areas whether that be in sales or cost efficient goods. It is the result of a combination of what a business is capable of doing and how it strategically uses it’s resources. Under the best conditions to which the resources are used in the most efficient manner it is said that the business is operating at it’s peak. This can either create one of three things the first being producing goods at lower cost or creating products with superior quality or having a larger brand awareness in the market then others. An effective competitive advantage usually hard to replicate by your competition because of cost constraints or a series of other reasons that works in your favor only.
Intellectual property or IP is an intangible asset that can be represented in the form of trademarks, patents and copyrights. The IP of a business helps sets it apart from its competition and contributes significantly to the value of a business. Companies with a reputation for providing high quality goods have an advantage in terms of market value as consumers are more willing to pay for the product with the highest quality produced at a more cost effective manner. This could improve a business’s brand recognition and enhance its competitiveness with other businesses. Businesses who have a strong brand recognition through their IP usually have a much easier time getting financial support from lenders because they recognize the value in their IP.
The next two important resources are the financial resource and human capital of the business. Businesses with the capability to fund the development of new goods have a leading advantage in terms of being cost over those that have to rely on lenders to expand their operations. This couldn’t be more true for small businesses who unlike their corporate counterparts most of the time don’t have the budget to develop the goods they want as much as they would like to. A good credit rating helps you avoid the hassle that comes with applying for funding for large projects or expansion. This combined with a strong brand awareness increases your chances of getting financial assistance. Business of course is nothing without it’s labor force because good management and having a strong financial resource could go a long way but in end those two alone are not enough. It’s important that you have skilled, competent and reliable workers that you can trust to work at the rate you’d want them to which is why investment in this resource is very important because if you have to keep replacing employees your business is losing time and money having to train new people and getting to work at peak performance level meaning your rate of production will suffer.
All of these things are very important to keep in mind if you want to increase your business’s success. It is not easy finding what strategy will work well for your business and be difficult to copy from your competitors so if you want to find out ways your business can improve in anyone of these areas do research on your competitors and your own business plan. See what you could do that others will have a hard time trying to do and use it to your advantage. A strong business plan coupled with a strategy to get you where you want your business to be will enable you to reach that goal.