How to Find and Strengthen Competitive Advantages

Clients in B2B and services rarely make decisions at random: before a deal they compare several suppliers and directly ask, “why you, not them.” A convincing answer is the result of systematic work on competitive advantages: what exactly in your company and product is more valuable to the buyer and why it’s hard to replicate. Below is a practical guide: types of advantages, Porter, Lamben and SWOT models, a step-by-step algorithm, metrics, examples and a ready checklist.

What exactly counts as a competitive advantage and why review it regularly

Competitive advantage — a characteristic of a company or product that creates greater value for the customer than competitors do, and is difficult to copy. It is always relative: it exists only in comparison with the market.

Why periodically analyze your company’s competitive advantages:

• to formulate an honest USP instead of generic phrases about “quality and individual approach”;
• to justify price and reduce discount pressure;
• to choose segments where you are objectively stronger;
• to notice in time that an advantage is eroding.

It’s important to distinguish product competitiveness (comparison of a specific product) from firm competitiveness (comparison of companies as systems). A product is copied in weeks, a system — in years, so the long-term bet is at the firm level.

Types of competitive advantages: internal and external

A classic approach from the work of J.-J. Lamben divides advantages into internal and external.

• Internal rely on costs and productivity: cheap production, efficient logistics, automation, economies of scale. They allow you to sell cheaper while maintaining the same margin.
• External are built on distinctive qualities valuable to the customer: unique features, service, speed, brand. They justify keeping price above the market.

Internal advantages lead to cost leadership, external ones — to product differentiation. These are the two basic Porter strategies.

Natural, artificial and sustainable competitive advantages

Another perspective is by the origin of the advantage:

Type	What it is	Example
Natural	Objective facts about the company	Lower price, delivery time, 15 years in the market, a staff of certified engineers
Artificial	Marketing-created trust enhancers	Outcome guarantee, case studies, personal manager, lead magnet
Sustainable	Advantages that are hard to copy	Patent, strong brand, unique technology, exclusive resource

Sustainable competitive advantage — one that persists for years and is not quickly reproduced by competitors. It determines long-term profit. Natural advantages are easily copied, artificial ones almost always are, while a patent, reputation or network effect provide protection.

Porter’s Five Forces model for assessing the competitive environment

Porter’s Five Forces (Michael Porter, 1979) helps evaluate not a specific firm but the attractiveness of an industry and pressure on profit. The five forces:

1. Rivalry among existing competitors — intensity of competition.
2. Threat of new entrants — how high entry barriers are.
3. Bargaining power of suppliers — can they dictate terms.
4. Bargaining power of buyers — can customers push the price down.
5. Threat of substitutes — are there alternative ways to solve the customer’s problem.

The stronger the pressure, the lower the potential margin. Such an analysis suggests where to build defenses: increase entry barriers via expertise, reduce dependence on a single supplier, strengthen value to reduce price negotiation impact.

Jean-Jacques Lamben model: market power and productivity

Jean-Jacques Lamben proposes to measure a company’s position on two axes:

• Market power — the customer’s willingness to pay above the main competitor’s price (an external advantage, differentiation);
• Productivity — how much lower your costs are compared to a competitor (an internal advantage).

Lamben also describes market types — perfect competition, monopolistic competition, oligopoly, monopoly — and a matrix of competitors’ elasticity of response: how rivals react to a price cut or advertising attack. If Porter answers “how attractive is the industry”, Lamben answers “where exactly is my firm and why it holds its position”.

Comparing analysis models: Porter, Lamben, SWOT

No single model replaces the others. Maximum benefit comes from combining them.

Criterion	Porter’s Five Forces	Lamben model	SWOT analysis
Object	Industry	Firm position	Company and environment
Main question	Where is the pressure on profit	What keeps our position	Strengths/weaknesses and risks
Key axes	5 forces of pressure	Market power and productivity	S-W-O-T
When to apply	Market assessment, industry entry	Choosing price/differentiation strategy	Quick inventory, start-up
Complexity	Medium	High	Low

A practical order: start with a SWOT of competitors and your company for an overall picture, add Porter for market context and Lamben to choose between price and differentiation.

Step-by-step algorithm to analyze a company’s competitive advantage

Here is a working algorithm that covers the whole cycle — from data to plan.

1. Collect data. 5–7 direct competitors: websites, price lists, USPs, reviews, social media, commercial offers (you can request them as a mystery shopper).
2. Create a list of evaluation parameters. 8–12 factors important to the customer: price, lead times, warranty, assortment, service, expertise, geography, reputation.
3. Build a comparison matrix. Rate yourself and competitors on each parameter (for example, on a 1–5 scale) and weight by importance to the customer.
4. Evaluate sustainability. For each advantage ask: can this be copied within a quarter? If yes — it’s not a sustainable advantage, but market hygiene.
5. Create an improvement plan. Strengthen what customers value and what is hard to copy; close critical gaps.

This is how to answer how to uncover competitive advantages: find the intersection of “important to the customer” and “we do it better than competitors” — and verify sustainability.

How to evaluate competitive advantages: methods and metrics

Evaluating competitive advantages combines qualitative and quantitative approaches:

• Observation of competitors and the market;
• Surveys of employees — salespeople know real customer objections;
• Competitor analysis via a parameters matrix;
• Studying customer values through interviews and reviews.

A simple weighted competitiveness index formula:

Index = Σ (score by parameter × weight of importance)

Example calculation for three parameters (scale 1–5, weights as fractions):

Parameter	Weight	Us	Competitor A
Service speed	0.4	5 (2.0)	3 (1.2)
Price	0.35	3 (1.05)	4 (1.4)
Expertise	0.25	5 (1.25)	3 (0.75)
Index	1.0	4.30	3.35

Such a matrix clearly shows where you win (service, expertise) and where you lag (price) — and where to direct resources.

How to formulate and present competitive advantages to customers

For an advantage to work in sales, follow four rules:

• Specifics instead of claims. Not “fast delivery” but “delivery within 24 hours or your money back.”
• Customer-benefit language, not company features: “save 3 days on approvals.”
• Proof — numbers, case studies, guarantees.
• Differentiation: the wording should set you apart, not repeat everyone else.

Description template:

Block	What to fill in
Customer problem	What pains the buyer has
Our solution	What we specifically do
Difference from competitors	What others don’t have
Proof	Number, case, guarantee
Benefit	What the customer will get

Typical mistakes when analyzing competitive advantages

• Comparing yourself to the market “in your head,” without data and a matrix.
• Confusing hygiene (what everyone has) with an advantage.
• Describing advantages in company language rather than customer benefits.
• Ignoring sustainability: a copyable advantage gives no protection.
• Doing the analysis once and never updating it.
• Relying only on management opinion without asking customers.

Examples of competitive advantages across industries

• Logistics company (B2B). Sustainable advantage — an in-house tracking IT system: the client sees the cargo in real time. Expensive to copy, increases retention.
• IT integrator (services). Differentiation via narrow specialization: only implementations for healthcare. Niche expertise becomes an entry barrier for generalists.
• Manufacturer of industrial equipment. Cost leadership through localized assembly — price 15% lower than imported analogs with comparable quality.
• Real estate agency. Artificial advantage — a guarantee of legal transaction cleanliness with financial liability, boosting trust in a competitive market.

How to increase a business’s competitive advantages

To strengthen competitive advantages, move in three directions: reduce costs without losing value, deepen product differentiation and build assets that are hard to copy — brand, IP, customer base, unique competencies. Invest in factors customers named as important in interviews, and turn one-off findings into systemic processes.

Checklist for independent analysis of competitive advantages

• 5–7 direct competitors identified
• Price lists, USPs and reviews collected for each
• 5–10 customer interviews conducted
• Salespeople surveyed about objections
• A list of 8–12 evaluation parameters compiled
• Parameters weighted by importance to the customer
• Comparison matrix with scores built
• Competitiveness index calculated
• Sustainability of each advantage checked
• Advantages formulated in benefit language
• Improvement plan with priorities created
• Date for next review scheduled

Go through this checklist — and you’ll have not a set of slogans, but a substantiated picture: where you are objectively stronger than the market, what to strengthen and how to communicate it to the customer.