The one question you need to be able to truly answer…
“Why would someone buy from me and not the person down the road?”
Easy to ask, difficult to answer.
Put another way, are you clear on what makes you special? How would you describe your competitive advantage (CA)?
The reason the answer to this question is so critical is because it should be your starting point.
How can you develop a business strategy, let alone fix on a business model, without a CA that differentiates your business?
Armed with a distinct CA the development of your strategy across marketing, operations, HR and finances should become much clearer. They will have a better chance of working together and building, rather than pulling apart at the seams.
The trouble is that uncovering, or developing, a CA is not an easy process . Those that have been able to invent a product, a feature or a business model that is unique and impossible to copy are few and far between.
From my experience here are a few thought starters to help you on the path:
1. Innovation not invention. Invention is one way to deliver CA but is a high wire act for most. Innovation, however, is attainable. Innovation in how you understand, meet and deliver based on uncovering true customer insights – in way that is unique. Ensuring innovation is a way of doing business and a strategic plank should be core to your business model.
2. Beyond the product. It’s not just about the product…in fact it may well be about everything that surrounds it and is experienced by customers at every touch point. The service journey, your positioning, the niche you serve, may well be where your CA lies. Bendigo Community Banks, for instance, were able to identify a niche that was abandoned by others and developed a unique model that has really hit the mark.
3. Filter. A robust, clear CA will become a filter for what you do and how you do it. If it can’t meet the test of being how you prioritise both big (and small) initiatives then it either isn’t a true CA, or you are not committed to making it so. These are not short term tactical activities – it’s strategic, and key to your success. When I visit Boost Juice it seems me that they have a very clear view of their CA and how it translates into their total brand experience – it’s being used as a filter or guide for what they do every day.
4. Be adaptable, and quick…CA is not static. The pace of change and the ability to imitate and reproduce at lower cost is a global phenomenon. Adaptability therefore must be a core competence. It means staying ahead of competitors and carving out a niche in meeting customer needs better than anyone else. Attempting to live off past glories based on a no longer valid advantage is the path to extinction. Retail is literally littered with such failures the most recent here in Australia being Fletcher Jones. So, are you able to easily let go when you need and move quicker than anyone else?
And finally, for those of you that think you are in a commodity market and competitive advantage is not possible – think again.
There is no such thing as a ‘commodity market’…only ’commodity marketers’. Anyone for bottled water?