A strong corporate strategy identifies how your team is going to beat the competitors in markets you are competing. If you don’t decide on which competitive advantages you’ll use to reach new audiences, your prospects will decide for you, costing you revenue and control over your product. As a resource, follow along starting on page 62 of SBI’s annual workbook.
Here’s what you need to know to define your competitive advantages and make your number. First, establish how to ensure that you do not suffer from false differentiation. Second, which of the three competitive advantages do you select.
There’s an easy way to break down your options during this process. There are three main sources of competitive advantage:
- Price: Your products are offered at a better price than your competitors’ products.
- Product: Your products are more enticing or robust than your competitors’ products.
- Customer Experience: You establish helpful, in-depth customer relationships better than your competitors do.
If you haven’t picked one, your customers will pick one for you: Price. In other words, if you don’t provide a product that’s better than what your consumers are offering, or you don’t ensure for a helpful customer experience, your audience will force you to drop the cost of your product. Because that’s the only pull you’ll have left to reel them in.
Don’t put yourself in a position of merely reacting to audience demand. Build a Corporate Strategy that clearly communicates what you’re offering and why it’s better than what your competitors are putting into the market.Here’s how to do it.
How do I define my advantages?
In order to figure out which advantages your company should use to make the number, your Corporate team should answer these seven questions:
- Which of the three sources of competitive advantages should we choose: Price, Product, or Customer Experience?
- If we pick Price, how are we streamlining our cost model to deliver our products to market at a price lower than the competition?
- If we pick Product, how are we investing in our product so it is superior to the alternatives in a way that buyers value?
- If we pick Customer Experience, how are we creating a unique experience that our buyers are willing to pay for?
- How have we ensured we do not suffer from false differentiation – differentiation that is not important to the marketplace or is a false presumption of superiority?
- How have we ensured we do not suffer from uneconomic differentiation – differentiation that customers are not willing to pay for?
- How have we ensured we do not suffer from unsustainable differentiation – differentiation that is easily imitated?
With your competitive advantages clearly defined, your team can finalize its Corporate Strategy and hand off the necessary information to the Product, Marketing, and Sales teams. This way, your company’s strategies will be aligned to most effectively hit next year’s sales targets.
To answer these questions for your team, come see me at The Studio. Selecting the right markets and identifying the competitive advantage is not easy to do. I can guide you through the process. The Studio, SBI’s multimillion dollar, one-of-a-kind, state-of-the-art executive briefing center. Sessions at The Studio are experiential and are designed around the principles of interactive exercises, hands-on innovation, and peer-to-peer collaboration. The Studio is a safe haven for learning and after just a few days clients leave with confidence and clarity on what they need to do to grow revenue and how to do it.