In a world where even luxury goods are treated as commodities, finding a way to distinguish your enterprise from others is vital to success. Unfortunately, few business truly recognize how to distinguish themselves and instead try to compete based on features that can easily be reproduced.

Big-box retailers try to compete on inventory space. Coffee shops try to compete on ambiance - seating, lighting, and mood music. Burger joints try to compete on customization and price. Cell phone manufacturers try to compete on screen size, camera resolution, and software features.

None of these are competitive advantages; they could all be easily copied (and will be copied) by others in the industry as soon as they hit the market.

Real Advantage

Technical features can be patented to prevent competition. With the current state of patent law, and the sheer number of patent trolls submitting applications,[ref]Apple actually submitted an application for networked messaging. It was a broad enough patent that it could be seen to apply to any pair of devices that communicate wirelessly over any protocol. Still, they were awarded the patent.[/ref] it feels like patents aren't necessarily the way to go.

Instead, compete on a factor that can be readily reproduced, makes sense, and which your competition would be insane to reproduce. Costco, for example, competes with other big box retailers not on price, but on their return policy. It's commonly known that you can return anything to Costco for any reason with no questions asked. I've seen customers return half-eaten candy bars and get their money back.

Is it a policy open to potential abuse? Yes. Is it a policy that sets Costco far apart from other bulk retailers? Absolutely. Is that why I shop at Costco rather than similar outlets? Yes.

Costco doesn't always have the best selection, the most reliable on-floor support, or even the lowest prices. What they do always have is an insanely generous and absolutely reliable return policy. The amount of trust this instills in their customer base cannot be overstated.

Potential Examples

In a world where there's a constant fight between consumers and manufacturers over the right (or lack thereof) to "root" a smart phone, imagine what the response would be to a carrier who sells already rooted devices. Overnight, even the smallest carrier would become known to offer a level of service unmatched by anyone else in the industry.

Copiable? Yes. Would other carriers actually copy the concept? Given their response to consumer attempts at rooting, probably not.

What insane levels of service can you offer to distinguish yourself from the competition?