Every business needs to be differentiated. Whether you’re a local eat-in restaurant that only serves hot dogs, or a multi-national corporation selling aesthetically pleasing MP3 Players and computers, you need a way to differentiate yourself from your many competitors.
If you know what your differentiating factor is, then you’re well ahead of the game; once you know what the difference between you and your competitor is, it’s easy to be able to tell people why they should be from you and not him.
However, if you have nothing differentiating you from your competitor, you should be considering a change in the business model/product offering/or pricing.
After all, if you’re just like everyone else, why should anyone buy anything from you?