Don’t sleep on BusinessWeek’s summer double-issue—it is chock-full of great knowledge nuggets for us biz folk to gnaw on and gnaw over.The article on creating competitive advantage is particularly worthy of gnawing on and over. Snippets include:
“As hard as it has become to create an edge, some smart organizations are finding new ways to do it. Not for good, mind you -- maybe not even for the years that many companies and their investors have come to expect. But a few standouts are managing to do the next best thing: They keep creating new competitive advantages, over and over, faster and faster.”“They're organizations that have learned to adjust to rapid social, economic, and competitive changes with relative ease. The most successful among them don't settle for hunkering down in soul-depleting market-share wars to protect an increasingly fleeting edge. Instead they zig and zag with the zeitgeist to keep coming up with new ideas.”
“… in an era when the competitive playing field is constantly morphing, a few key guidelines have emerged for how to stay ahead of the pack.
The article goes on to share five guidelines for creating competitive advantage of which, I’m still gnawing on and over these three:
1 | Don’t Just Get Bigger, Get Unique
This guidance syncs up with my Starbucks Tribal Knowledge of “Make the Common Uncommon.” After all, who really wants to sell a common, ordinary, everyday, me-too product? More important, who wants to buy one?
Michael Porter, business strategy clairvoyant from Harvard Business School, adds the following money quote in the article. “There is no best auto company, there is not best car. You’re really competing to be unique.”
2 | Why Compete? Create New Markets
"Niches are nice, but inventing a new market is whole lot better." Ahh … "Blue Ocean Strategy" at play here. The article rightly touches upon Cirque de Soleil as a benchmark business which created a new market with no significant direct competitors.
3 | Obsess about Customers, Not Rivals
There’s lots of truth in that pithy statement. The by-product of focusing on meeting/exceeding customer needs/wants is the creation of a competitive advantage, while the by-product of mimicking competitors is the creation of a competitive disadvantage. Enterprise Rent-a-Car obsesses over its customers more than it rivals and success has followed. Same goes for Whole Foods Market, The Container Store, and Kimpton Hotels.
"Niches are nice, but inventing a new market is whole lot better."
Well, gee, first create a product and service and then create the market. Sorry, I could not disagree more, although we can name some real successes that used this model.
I have been laid off twice--both times with established corporations who tried this. You don't need to kick me in the pants thrice. I prefer the Starbucks model. Create a better product or service for a market that exists and wants better value.
Posted by: Lewis Green | August 22, 2006 at 12:26 PM
Lewis … could it be we are caught up in a game business semantics? After all, isn’t the byproduct of creating a truly viable niche product the creation of a new market?
A quick look at some “legacy” brands seems to prove this out …
Kinkos niched its way to creating a new market (copy/office centers).
FedEx niched its way to creating a new market (overnight delivery).
Motel 6 niched its way to creating a new market (economy motel).
Sam Adams niched its way to creating a new market (specialty beer).
Wal-Mart niched its way to creating a new market (deep discount retailer).
Whole Foods niched its way to creating a new market (upscale natural grocer).
Starbucks niched its way to … well … you know the drill.
Posted by: johnmoore (from Brand Autopsy) | August 22, 2006 at 09:02 PM
Sure it's great to create something that's unique. Unfortunately it's not as easy as it sounds. Not every one can create another Wal-Mart or Starbucks.
In real life people do compete on a more realistic level. I do agree with those 3 points, but I would also mention that if it was that easy ... we would see many more "Unique companies" than we see now.
Let's get realistic ladies and gents.
I'll be sure to Digg this post.
Posted by: Igor M. Search Marketing Blog | August 23, 2006 at 03:36 PM
In my experience, the reason we don't see more unique companies is due to fear rather than lack of any real inability to create something unique. There seems to be a deep aversion to narrow targeting because it can feel like you are alienating potential customers. But in my experience, as we narrow the focus we see more and more ways to turn even the most mundane of products into something captivating.
Posted by: Dominic Canterbury | August 24, 2006 at 04:08 PM
John,
Again, I'm struck with the parallel with church life. One of our biggest challenges is to keep the message fresh by paying close attention to what our immediate community/culture is responding to, interested in or needing. That "zig-zagging" results in shifts in our musical style, our promotional look and our presentation vehicle.
In doing so, we've discovered some niches that have allowed us to speak into other local churches... specifically about the power of innovation.
By the way, thanks for stopping by my site the other day after the book prop.
Posted by: mark waltz | August 25, 2006 at 04:14 AM