Business plans are often packed with information about the business and even the competitors, but they miss a concise explanation of how competitive advantage (see Porter, 1985) will actually be achieved. A business plan without this explanation does not fulfill its key purpose which is to demonstrate to then reader that the business will be viable and profitable. The plan should explain how competitive advantage will be achieved, for example:
- Will the products or services be cheaper than the competition?
- Will the products or services be better quality then the competition?
- Will the products or services be novel in some way?
- Will the products or services be offered in a more convenient way?
- Will the products or services be marketed, sold or distributed in a better way than the competition?
- Will the products or services be offered in a different geographic or demographic market to the completion?
- How will the claims for competitive advantage actually be achieved?
- How will the business counter retaliation from the competition?
After reading the plan it should be clear what and how the business will have a believable claim of competitive advantage. Without this explanation the plan is of little value.
Our business planning tool Business Plan Quick Builder ensures that competitive advantage is clearly emphasised and clearly explained. Get your plan started for free at www.businessplanquickbuilder.com
This blog was inspired by our answer to a recent Quota question.
Photo by Felix Mittermeier on Unsplash
