By Maurie Cashman
How do you differentiate your business when there is so much competition in your marketplace? Two weeks ago I participated in our annual Exit Planning Institute meeting and had the opportunity to present at two breakout sessions on this topic. The conference was particularly valuable to me due to discussions centered on differentiating your business.
â€œPerception is strong and sight weak. In strategy it is important to see distant things as if they were close and to take a distanced view of close things.â€ Miyamoto Musashi
The keynote speaker was Chuck Hollander and I will borrow heavily from his presentation to communicate the ideas that we discussed and that you should be thinking about for your business.
Competing in a crowded marketplace doesnâ€™t make it easier to compete, it makes it harder. You must have a business advantage. What is yours? When a business lacks differentiation it is a form of inefficiency.
Companies can have similar visionsâ€¦however; your strategy is what sets you apart.
Similar strategies make you substitutable.
Your strateg(ies) become your competitive advantage(s).
Your strategy becomes the reason why a client chooses to work with you and not a competitor.
Strategy is your single greatest decision and responsibility as a business leader.
Without a sound strategy you are leaving the most important asset you have (your business) to chance.
Your strategy should be the simultaneous pursuit of differentiation and best-cost to create new market space. Your strategy should be to make the competition irrelevant by creating a leap in value for both the company and its customers. To be successful at this, you must create discernible differences in offerings that increase both the value of your company and the value of your clientâ€™s company.
In the known market space, all of the rules of the game are known and accepted and industry boundaries are well-defined. Companies try to grab market share from one another by marginal changes in products, services and price. The market gets crowded and prospects for profits and growth are reduced. The product becomes a commodity, profits are reduced and often consolidation occurs as companies try to survive by combining to cut costs and increase bargaining power.
The book Blue Ocean Strategies states that â€œcompeting in overcrowded industries is no way to sustain high performance. The real opportunity is to create Blue Oceans of uncontested market space.â€ Blue oceans represent the unknown market space and are defined by untapped space, demand creation, and the opportunity for highly profitable growth. Competition is irrelevant because the rules of the game are not set. You can create strategic advantages by expanding or reconstructing industry boundaries.
You should be asking yourself key strategic questions about your client offerings, the trajectory of those offerings, the competitive landscape, the pain points when looking across the entire customer experience and how you can reconstruct market boundaries. What actions can you eliminate, reduce, create or increase that will further differentiate you from your competitors and create tremendous value for your customer?
I have personally experienced the power of these concepts in many businesses and have tried to incorporate them into Aspen Grove Investments. While it is not the easy route, I firmly believe it is the route to creating sustainable and valuable businesses.