In today’s business landscape, where many businesses operate within the same field or industries, having a competitive advantage over others is crucial for a business not only to thrive but to also ensure long term success.
Kenya’s market-driven economy positions it as a key player and a leading economy in Sub-Saharan Africa, which makes it a hub for a wide range of business ventures.
As of 2023, Kenya had over 5 million informal MSMEs operating in the country and approximately 1.5 million formally registered MSMEs.
This in itself presents an issue of how to gain a competitive advantage within the diversity of the enterprises, to maximise returns and operate as a growing concern.
These MSMEs can also not be overlooked, having contributed 30% to Kenya’s GDP in 2023. According to a Kenya economic survey, MSMEs are projected to contribute 50% of the GDP growth over the next 5 years.
The measures we will explore are not one size fits all in gaining competitive advantage, as the needs and strengths of SMEs differ across sectors and regions.
Keeping this in consideration, here are some measures that an entrepreneur can use to gain a competitive advantage in the market:
Create valuable personal connections with clients and staff to enhance customer retention and satisfaction:
In order for businesses to retain customers, stand out from the crowd and build customer loyalty in this very competitive market dynamics, they must establish a strong connection with their customers.
To build such strong connections, it is important to understand the needs and wants of your target market by carrying out market surveys. This is also crucial in getting to know your target market as a business.
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Through market surveys and research, it is feasible to obtain precise data, which enables the curation of products and services tailored to address identified customer needs and wants.
This is a step towards gaining an advantage over competitors who do not conduct market research to access the needs of the market at that time.
Meeting customers’ needs at every stage will foster customer satisfaction, loyalty, and retention.
Effective Talent Management and Retention Mechanisms:
Effectively hiring, managing and retaining top talent, ensures continuity and retention of best practices and skills within a business, while reducing time and costs incurred in recruiting and training new staff.
With minimal disruptions, it is easy for a business to leverage this top talent to achieve a level of operational efficiency while gaining a competitive edge in delivering top-notch products and services.
As it is well said, a business is only as strong as its people. Creating a culture where employees feel challenged and supported while offering professional development opportunities will go a long way in retaining skilled human capital.
Have a strong market presence:
Social media marketing is one way of getting a head start to market your business, product or services.
84% of surveyed SMEs reported Facebook to have been important for their business growth (Africa Public Policy).
Actively promoting your business and brand on social media will give an entrepreneur an edge over businesses that do not have a social media presence.
This strongly allows businesses to directly engage with their customers and gather valuable feedback.
A great website that is user-friendly and has highly engaging content will also tend to pull customers, just like social media platforms.
Following each customer engagement or interaction, having convenient avenues for the customers to share their feedback and reviews across social media platforms and on the website.
Positive reviews will equal high-quality products or services, which will equal premium charges, and customers who have an eye for quality will stick with the business over your competitors.
Adapt Flexible strategies:
Strategies are put in place with the best information available and with the intention of achieving the best outcomes for any business.
However, in this current era of dynamic information, it is prudent to exercise flexibility in strategy formulation to achieve high business performance.
Seeking new strategies will help an entrepreneur/business take advantage of new opportunities in the market while stabilising any new threats not initially addressed.
Leverage on adequate working capital:
With effective skilled staff retention mechanisms, flexible strategies and high client retention comes efficient working capital management.
This enables easier decision-making in matters of financial decisions, which will facilitate scalability compared to competitors who might struggle with financing/finances.
Moreover, working capital paves the way for easier investments in product development and acquisition of new technology in the related industry and beyond.
Generous amounts of working capital can strengthen an entrepreneur’s competitive advantage through acquisition of smaller businesses, ultimately positioning it as a dominant player in the market.
Patents, copyrights, trademarks and domain names:
Traditionally, patents, copyrights and trademarks were used to safeguard unique business inventions and creations, locking out unauthorised imitation of ideas by competitors.
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However, in this digital age, social media and domain names have emerged as additional tools that are also important in a competitive environment.
Securing relevant and memorable domain names makes it simpler for customers to engage and find the business online while creating barriers to entry in the market.
It enhances brand visibility and market presence differentiating a business from its competitors.
Unique value proposition and clear framework on how the business will operate differently to achieve its value proposition:
A unique value proposition and a clear operational framework can help a business stand out in the market, strategically position itself in the market, attract, retain customers, build a strong brand reputation and in the long run lead to achieving a sustainable competitive advantage.
Conclusion:
The MSME sector has been identified and prioritised as a key growth driver for achievement of Kenya’s development blueprint and realization of Vision 2030 goals.
Raising the competitiveness of Kenya’s SMEs will support the country’s efforts in achieving these goals.
If businesses focus exclusively on their resources and ignore industries where they operate, they might easily miss out on opportunities to establish a competitive advantage.
It is recommended that for a business to gain competitive advantage, both tangible and intangible assets (people, processes and innovation) must be put into play to derive efficiency in the competitive market
