The Definition of Geographic Competitive Advantage

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Geographical competitive advantage means that you have some type of business advantage based on your geographical location. Learn about the definition of geographic competitive advantage with help from a business consultant in this free video clip.

Part of the Video Series: Finance & Business Advice
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Video Transcript

Hi, my name is Alexis Guerreros; I'm a Business Consultant. Today, I'm going to talk to you about geographical competitive advantage. Now, basically put really means the competitive advantage you have over those that maybe sells the same product or in the same business based on your geographical location. So, in other words, where your business is located. The easiest way to explain this, let's say, there's two restaurants. Alright, so here's restaurant number one and here's restaurant number two. Now, you both sell seafood. Here's the benefit of restaurant number one; you're located near water and restaurant number two, they're all the way down by a cattle ranch. So, you're going to be closest to the water which means you're probably going to get to the fish first and it's going to be fresh when it gets to your table because there's less time that it has to travel. So, you're going to be able to charge less money for that fish than the person over down by the cattle ranch, well, because they're a little bit farther and like I said, it's going to have farther to travel. Let's say, you both decide to stop selling seafood and now you're a steak house. Well, now restaurant number two is going to have the geographical competitive advantage because they're near the cattle ranch. So, you're all the way over by the water which means you now have to travel farther to get that steak and it's going to be a little bit more money for that travel and it's not going to be as fresh as restaurant number two. So now, restaurant number two has a competitive advantage. Keep that in mind when you're creating a product or when you're deciding what to sell. How close are you to the product that you actually need? Maybe it's not even the end, end product, it might even be the resources. Maybe it might be water or oil or still that you need to create the product that you're deciding to sell. Think about where you are in difference with your competitors and make sure that that advantage is as level as possible. Good luck with your business.

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