Data analytics and competitive advantage are often touted as deeply interlinked concepts. Throughout our blogs, we often hint at the correlation between data analytics and competitive advantage – often elaborating on how an analytics platform like SAS can help you get ahead of your competitors. In this blog, I am going to take things a little further and explain the different ways data analytics enables companies to surge ahead of the competition.
What are the factors that drive the correlation between data analytics and competitive advantage?
As many in business know, competitive advantage refers to what makes a company’s goods or services superior to others. In more blunt terms, why should customers buy from you instead of from someone else? Companies have tried to build on this advantage in many ways like reducing costs, developing new products and improving the overall customer experience.
However, what many overlook (surprisingly) to this day is the staggering value and benefits created by the direct relationship between data analytics and competitive advantage. This linkage has the potential to improve and build on existing advantages, thereby strengthening a company’s market position (or sustaining it, if it’s already at the top).
Discover new ways to cut costs
Organisations use cost-cutting to improve their competitive advantage by lowering production costs and passing on the benefits to consumers. By merging data analytics and competitive advantage-focused strategies, businesses can leverage their monumental data assets given that they provide organisations with new ways of cost-cutting.
Analytics can reveal inefficiencies and flaws that would be impossible to capture through conventional means. Thus, organisations can develop new cost-cutting measures focusing on removing inefficiencies and cutting down waste in resources.
An excellent example is Airbus. The aviation corporation used data analytics to improve manufacturing, development and maintenance processes. The change in processes reduced the number of operational interruptions disrupting flight schedules and made better use of resources when designing a new aircraft. Data analytics also provided real-time data which was also expected to cut fuel usage by 15%.
Better deployment of resources
To maintain a competitive advantage, organisations have to be smarter and more creative in resource management. Data analytics can help in this area by helping organisations deploy resources intelligently.
Big data provides insights into the granular operations of a company that are easily missed with other means. When these insights are placed in the hands of business-minded individuals, they can identify ways to make better use of their resources without resorting to cost-cutting measures.
To achieve this goal, the zoo used analytics to study historical attendance data, ticket sales and real-time weather. The insights from the study allowed them to anticipate attendance and deploy resources accordingly. Thus, more staff were called in during peak attendance and less when attendance was down.
Personalised customer service
The internet has changed the customer-retailer relationship. Thanks to Amazon and Netflix, customers have grown accustomed to personalised service and now expect organisations to provide a similar level of customer service. Those who don’t will lose competitive advantage.
Fortunately, data analytics allows organisations to provide personalised customer service. Analytics platforms can capture and breakdown customer purchase history into a detailed individual profile. Analytics goes beyond the basic demographic information – it can even go as far as to depict what the customer will buy, and under what circumstances. Thus, paving the way for personalised customer campaigns in brand awareness and engagement.
Amazon and Netflix are the best examples of organisations using data and analytics to provide personalised customer service to their customers. Using past purchases as a barometer, Amazon provides a series of recommendations that are catered specifically to that customer. Something that can only be achieved with data analytics because they have a shopper base consisting of millions. The result? A service that is almost unparalleled and incredibly difficult for competitors to compete with.
Competitive advantage is vital for any organisation to survive. To compete, organisations have to discover new ways to cut costs, deploy resources more effectively, and develop ways to reach out to each of their customers individually. All of this can be achieved with data analytics. Data analytics provides brand new insights not found through other tools. These are insights that can pave the way for other organisations to make better use of their resources, cut costs and personalise their services to strengthen their advantage.
Are there any other ways data analytics strengthens competitive advantage? To learn more about the positive effects of data analytics, visit our blog.
Give your business a competitive edge by leveraging your data analytics capabilities with the Selerity analytics desktop. With this software, you’ll have access to your own SAS pro analytics environment. Contact our support team to learn more.