Why businesses are using Big Data for competitive advantage
Data is now an important tool for businesses to utilise, whatever sector they operate in and whether they’re a global company or a small firm. Companies are increasingly using big data to gain a competitive advantage over business rivals but how does it benefit them?
Analysing the datasets a business gathers is just one part of the big data process. Big data experts also need to understand what the company wants to gain out of the exercise and how they intend to use the information to their benefit.
Confident decision making
Analytics aims to improve decision making and big data continues to support this. With so much information available big data can help business speed up their decision making process while still being confident in the choice they have made. In today’s quick paced world being able to act fast and respond to wider trends and operational changes is a huge business advantage.
Big data means that companies can monitor assets at an individual level. This means they can better optimise assets based on the data sourced, improving productivity, extending the lifespan of assets and reducing the downtime some assets may need. This provides a competitive advantage by ensuring the business are getting the most out of its assets and links with cutting costs.
Ready to discover the data dimension?
Join the entire industry at Big Data LDN. The UK’s leading Data, Analytics & AI event.
Big data can help businesses cut down their outgoings. From analysing energy usage to evaluating the effectiveness of staff working patterns, data collected by companies can help them identify where they can make cost savings without having a negative impact on business operations.
Improve customer engagement
When browsing online customers make certain decisions indicating their preferences, habits and tendencies that can then be used to improve and tailor customer dialogue, which could then translate into increased business.
Understanding what each customer is looking for through the data stored on them not only means you can target them with certain products but it also gives service a personal touch that many consumers today have come expect.
Identify new revenue streams
Big data analytics can also help businesses identify new revenue streams and expand into other areas. Understanding customer trends and decisions allows firms to make decisions about the direction they should go. The data businesses collect can also potentially be sold, adding a further revenue stream and the potential to build partnerships with other businesses.
Enjoy this article? Make sure to share it!
Looking for something else?
FAQs
Big data can help businesses cut down their outgoings. From analysing energy usage to evaluating the effectiveness of staff working patterns, data collected by companies can help them identify where they can make cost savings without having a negative impact on business operations.
Why are businesses using big data for competitive advantage? ›
Leveraging big data will enable your company to understand what it's up against when competing for business. Market data on customer industries can suggest sliding emphasis from one industry segment to another. Data can also help you account for the overall business environment, too.
Why do businesses use competitive advantage? ›
A competitive advantage is what sets a business apart from its competitors. It is essential in order for a business to succeed, whether it's by ensuring higher margins, attracting more customers, or achieving greater brand loyalty among existing customers.
How can a company use data to gain a competitive advantage? ›
Here's how you can use data analytics to gain a competitive advantage.
- Better consumer insights. Suppliers can use data to predict that sales will increase during certain times of the year and increase production or order accordingly. ...
- Increase productivity. ...
- Sales forecasting. ...
- Using business data.
Big data can be used to pinpoint ways businesses can enhance operational efficiency. For example, analysis of big data on a company's energy use can help it be more efficient. Positive social impact. Big data can be used to identify solvable problems, such as improving healthcare or tackling poverty in a certain area.
What is the main advantage of big data? ›
Big data allows you to collect and process real-time data points and analyze them to adapt quickly and gain a competitive advantage. These insights can guide and accelerate the planning, production, and launch of new products, features, and updates.
What is big data business advantages and disadvantages? ›
It offers advantages such as improved decision-making, enhanced customer understanding, and operational efficiency. However, it also brings along challenges like privacy concerns, security risks, and data quality issues.
What are the benefits as a competitive advantage? ›
By focusing on the brand benefits you provide, you accomplish several important things: You show customers you understand their needs and how your product or service helps them, building connections and trust. You differentiate yourself from competitors who only talk about themselves.
Is data a source of competitive advantage? ›
It all depends on whether the data offers high and lasting value, is proprietary, leads to improvements that can't be easily imitated, or generates insights that can be quickly incorporated. Those characteristics do give firms an advantage.
What is competitive advantage in your own words? ›
Competitive advantage is the favorable position an organization seeks to be more profitable than its rivals. To gain and maintain a competitive advantage, an organization must demonstrate a greater comparative or differential value than its competitors and convey that information to its desired target market.
Data are extremely important for creating competitive advantage. The key is knowing which data matter and ensuring those who need the data, have access to the data, when they need it .
Why do we use information for competitive advantage? ›
In conclusion, information systems can be a powerful tool for organizations to gain a competitive advantage in their industries by improving efficiency, enhancing customer service, fostering innovation, enabling faster decision-making, and optimizing the supply chain.
Why is competitors data useful? ›
A competitor analysis is important because: It will help you recognise how you can enhance your own business strategy. It will tell you how you can out-do your competitors in these areas to keep your customer attention.
What is an example of a company collecting big data for competitive advantage? ›
Netflix. Netflix is unarguably the biggest online platform for streaming movies and TV shows, and it owes its success to Big Data. Because they know their users, their retention rate is 93% which, compared to their main competitors, is a huge number.
How can big data add value to businesses? ›
Big data can be used to get a comprehensive picture of the current state of a business and receive unobvious insights from analytics based on it; You can use big data solutions to build both short- and long-term business strategies led by the relevant information about all your workflows.
How is big data transforming business? ›
This means that data analytics is now being applied at every stage of the retail process – working out what the popular products will be by predicting trends, forecasting where the demand will be for those products, optimising pricing for a competitive edge, identifying the customers likely to be interested in certain ...
Why do large companies tend to have competitive advantages? ›
Large businesses spend more on marketing campaigns, can often offer a more varied product or service line and have the ability to handle a larger number of clients. These are obvious advantages, but other factors must be considered aside from sheer numbers of buyers.
What is the competitive advantage of data management? ›
Organizations can gain a competitive advantage by leveraging customer data for personalized experiences. Effective data management allows businesses to respond to market changes, adapt strategies, and introduce innovative products.
