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Using Location for a Competitive Advantage in Business

by Ron Kurtus (27 May 2007)

One way that a company can beat another company in getting sales is by having a superior business location.

If the competing company already has a good location, another strategy is to weaken or undermine that location.

If your superior location is being attacked, differentiating from the competition may help stave off the attack.

Questions you may have include:

This lesson will answer those questions.



Getting better location

The great adage for business success is "Location, location, location." You want to get a location for your store that is easy to access and convenient for shoppers. You want a location for your factory that is readily accessible to suppliers and distribution channels, as well as supply of workers.

Online businesses should have a web address that is memorable and easy to access. They may need to register similar web addresses, in case of user misspelling. A number of top web addresses have meant instant success for the owners. But also, the website should be convenient to use and should offer a good line of product.

It is important to seek a better location than your competition in order to gain a lion's share of the business in your area.

Undercutting the competition

Some businesses use a strategy of trying to undercut or diminish the location of their competitors. This is especially true of larger, predatory companies.

As they were expanding, national chains Barnes & Noble bookstores and Starbucks coffee houses were known to build a store near a good location of a smaller local business. They usually drew enough customers from the smaller retailer to drive them out of business.

Osco and Walgreens drug stores have tried to undercut each other's location by building stores nearby. This has resulted in the bizarre situation of seeing two large drugstores across the street from each other in many areas. Both companies seems to lose from this strategy.

Some e-commerce businesses will get a URL or web address that is similar to a competitor, so as to draw business from their opponent's site.

Defending against attack

If a competing business of the same size tries to undercut your location by opening a store nearby, you can defend against such an attack by improving the quality of your business and providing something unique that differentiates you from the other business.

But unless you can draw enough business to overcome the others' presence, you may still suffer a loss in sales.

You can use the same strategy if a larger, richer business horns in on your turf. Becoming a specialty business with a niche market can save some businesses from attack.

Summary

Superior business location an important way to beat your competition in getting sales. If the competing company already has a good location, another strategy is to weaken or undermine that location. If your superior location is being attacked, differentiating from the competition may help stave off the attack.


Location is essential


Resources and references

Ron Kurtus' Credentials

Websites

Competition Resources

Books

Top-rated books on Business Competition


Questions and comments

Do you have any questions, comments, or opinions on this subject? If so, send an email with your feedback. I will try to get back to you as soon as possible.


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