Many business leaders spend a good deal of time and resources trying to create an impactful marketing strategy and/or winning sales strategy – only to find that it doesn’t translate into increased conversions. Often times, it’s because an integral step was missed: defining the company’s competitive advantage.
The truth of the matter is that customers don’t think like we do about our business. They don’t care about your products or services; they care about the solutions you provide. There’s a reason they opt for your solutions over the similar versions offered by the competition, and that’s where your competitive advantage lives.
Understand the Competitive Advantage Concept
In their book, Disciplines of Market Leaders, Michael Treacy and Fred Wiersema remind us that “no company can succeed today by trying to be all things to all people. It must instead find the unique value that it alone can deliver to a chosen market.” They define three different value disciplines (or potential areas of superiority): operations, products, and service.
In our line of work, we see this concept in action every day, and early in the business coaching process, many of our clients want to be extraordinary in all three. But the reality is that the most successful companies focus on becoming an industry leader in one of these areas (while still being reasonably good in the other two). That specialization is what competitive advantage is all about.
Define Your Competitive Advantage
To define your competitive advantage, first consider these three value disciplines. Which fits best for your business’s strengths? What matters most to your customers?
#1 – Operational Excellence
This competitive advantage powers the ability to produce products and deliver services at a lower cost. Operating at the highest levels of efficiency means reducing the cost of doing business – a savings that can be passed along to the customer. Examples of companies that focus on Operational Excellence as their competitive advantage include Amazon, McDonald’s and Walmart.
#2 – Innovative Technology
This competitive advantage is all about quality and cutting-edge technology. Companies that offer superior products and services enjoy customers who are willing to pay a premium because of the brand’s reputation, dependability and (often) positioning as a status symbol. Examples of companies that focus on Innovative Technology as their competitive advantage include Apple, Mercedes, Sony and Rolex.
#3 – Customer-First Values
This competitive advantage is all about developing long-lasting, personal relationships with the customer. By investing in the time to nurture “intimacy” with their base, companies enjoy more loyal customers who are willing to pay more for the product or service on which they’ve come to rely. Examples of companies that focus on Customer-First Values include TD Bank, Harley Davidson and many locally based consulting, law, and financial advisor firms.
It’s time to ask yourself: what can we start doing to embrace our strengths, solidify our competitive advantage and begin to distinguish ourselves from the competition?
Unsure of Where to Start? We Can Help!
At FocalPoint Canada, we guide our clients in overcoming challenges and leveraging opportunities with proven processes and methodologies that have been used by thousands of successful businesses over the past two decades. Our FocalPoint business coaches use their expertise to teach our time-tested methods through individual coaching, group sessions, or trainings and workshops.