Unique Competitive Advantage – Company Examples

I want to do a little warm-up exercise to kind of get you in the mode of thinking about unique competitive advantage. So what I’ve done is I picked for companies that are very well known. So let’s take a first look at Nordstrom, one of my favourite companies. I love going into a Nordstrom. As a customer, I have to think, what is their unique competitive advantage. So I want you to think about that and answer that question. For me, and what they’ve done and they’ve established in their business is exceptional customer service. In fact, in the early days, somebody went into a Nordstrom, and they returned a pair of jeans.

They were about 10 years old, they were dirty, and they were ripped. And you know what? Nordstrom took them back, and so they became known as the company that would take back anything. And that speaks to their core value, which is we love our customers, we care about our customers, and we’re going to give them great service. So talk about sustainable competitive advantage. That’s something that’s been sustainable in their business. All right. Another great company that’s known worldwide is IKEA. What’s IKEA’s unique competitive advantage? What do their customers always go to them for they can’t get anywhere else? Affordable, well-designed furniture.

Sure, you have to put it together, and it takes a half a day, and you get a bag of bolts, right? Customers don’t care about that because at the end of the day, it looks great, and it was inexpensive. I love what they’ve done with their business. Ah, one of my favourites– Amazon. Amazon’s an interesting one. You might think, oh, Amazon’s unique competitive advantage is they have a lot of products. They have millions and millions and millions of products. I can get anything from Amazon, or I can get a really good price from Amazon as well. But that’s actually not what Jeff Bezos set out to do initially.

Jeff Bezos, in the early days of Amazon, said, I need to be the best at delivery, and that’s going to be my unique competitive advantage against all the other e-commerce sites out there. He understood that he was competing with retail. And when you’re competing with retail and I’m able to get it right away– he said, I’ve got to have a delivery network that I can deliver product same day, next day, or in two days and very inexpensively. He actually spent the first 10 years of the business perfecting his delivery system. I remember Wall Street saying, God, when is this guy going to make money? He keeps sticking it into his fulfilment systems and his delivery systems.

And the reliability of his delivery is second to none in the industry. It’s really hard to compete with Amazon, and it’s all about the delivery. Interesting. All right. And, of course, everybody’s favourite company– Apple. Of course, also the most valuable company in the world. What did they do differently than everybody else? An easy-to-use interface. In fact, if you go back to 1984 and the creation of the Macintosh, yes, that was the first computer that really was easy for everybody to use. And to this day, they are known for the easiest devices, including everything from the iPhone to everything they come out with is super easy to use.

It’s, again, something that’s been sustainable and very, very hard to duplicate throughout the entire life of their company. So now I want you to think for your own business, how can I do what these companies did? How can I create that unique competitive advantage that is something that nobody can duplicate, that is sustainable over time, that is timeless? And once you anchor your business around this, you can literally leverage this for many, many years to come.