No matter what business you’re in, having a competitive advantage is a good thing. It is often the difference between mere survival and amazing success. There’s no reason you cannot have a competitive advantage – if you want one. Who wouldn’t want one? There are three primary types of competitive advantages – a cost advantage, a differential advantage and a production 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 PCC customers have a cost of production that is 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 grassfed beef. While consumer demand for conventional beef has been good, the demand for grassfed beef has been increasing by leaps and bounds for the past 10 years.

A production advantage is created when a business is able to increase production without increasing the size of its facility and/or land base. With the right size and type of momma cows along with more intensive grazing practices, many PCC customers have doubled their beef production per acre! WOW! That’s like having someone give you another farm or ranch for free!

Several PCC customers have all three competitive advantages! They produce more beef at a lower cost than everyone else – and they sell it for more than everyone else. These producers are my heroes! They are doing what all of their neighbors say is impossible to do. Their competitive advantages allow them to be extremely profitable in good times, as well as in not-so-good times! The future belongs to them!

Quote Worth Re-Quoting

If all you are trying to do is essentially the same thing as everyone else, then it’s unlikely you will be very successful.

Michael Porter
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