Competitive Advantage –
Having a competitive advantage is always a good thing. We believe it will soon be the difference between mere survival and true success in the cow-calf business. There is no reason you cannot have a competitive advantage – if you want one. Who wouldn’t want one? There are two primary types of competitive advantages – a cost advantage and a differential advantage.
A cost advantage exists when a business is able to deliver the same product as competitors but at a much lower cost. This requires a lower cost of production. Low-input cow-calf producers, for example, have a big competitive advantage over status quo producers. Many (perhaps most) PCC customers have a cost of production that is less than half what the national average is. A differential advantage is created when a product differs from competing products and is perceived to be superior to competing products. Many PCC customers, for example, produce and market grass-finished beef. While consumer demand for conventional beef has been struggling, the demand for grass-finished beef has been increasing by leaps and bounds for several years. Several PCC customers have both a cost advantage and a differential advantage. They produce beef for less than everyone else and they sell beef for more than everyone else. These producers are my heroes! They are doing what all of their neighbors say is impossible to do.
Share on Social