Competitive Advantage & Added Value

Competitive Advantage & Added Value

1. Competitive advantage

   • This is when you have an advantage over competitors as you are offering your customers greater value. This could be in terms of having lower prices, providing a USP or any other added value feature that justifies higher prices.
   • Advantages
     • Gain more customers
     • More revenue (possibly more profit)
     • More customers leads to becoming more well known and growing as a business
   • Disadvantages
     • Costly
     • Time consuming

2. Added Value

   • Increasing the value of a product by improving/adding features which allow higher prices to be charged, e.g. a unique selling point (USP)
   • Advantages
     • Higher prices can be charged
     • Customers are likely to get value for money
     • Gives them a competitive advantage over competition
   • Disadvantages
     • If it costs a lot to make a high price will have to be charged which may put customers off
     • If the customers feel the value added onto the product doesn't warrant the price, the business may loose customers