What is the result of these efforts? Parity businesses fail to out-sell and outmanoeuvre their competitors, clawing in underwhelming profits and missing out on substantial potential growth.
Many C-Suite leaders may read this and strongly disagree, believing they have a business plan they are executing diligently. But is that truly different to your competitors’ plan? If not, it’s hardly a winning strategy and that lack of differentiation is seriously hampering your company’s potential.
Differentiation is THE strategy for competitive advantage. And the sharper your strategy, the more difference you will see – especially to your profits.
So what is a strategy?
Your organisation’s strategy is infinitely more than a boardroom buzzword. It’s your unique, top-level approach that forms the foundation of your business plan and directs the daily tactics of your operation. It distinguishes your organisation from your competitors and is fundamental not only to your organisation’s long-term success, but also to its survival.
The most effective strategies can be summarised on a single page. Ideally, they should be boiled down to one sentence. The strategy should be easily and frequently communicated to employees so that a cohesive business focus is always maintained.
Why your business needs one
Whether your organisation is a giant corporation or a six-person start-up, developing your strategy is vital. Without it, your organisation will struggle to attract customers, to outperform against competitors, and even to survive – let alone thrive. Many a company has floundered for want of a strategy.
A strategy ensures your organisation builds, maintains, and continually sharpens its identity in the marketplace – refining its valuable point of difference; helping customers to prefer and chose your products and services over those from your competitors.
Your strategy is also the nexus around which your business plan should be developed. It creates a framework to help you evaluate any changes to that plan. And it will enable you to define a consistent direction for all business areas.
In the absence of a sharply defined and closely followed strategy, organisations of every size can easily lose sight of their direction – especially when they encounter challenges which tend to push them into a highly reactive instead of proactive state.
How to start developing your strategy
To start developing your strategy, you first need to assess the current state of your sector. This includes not only looking at what your competitors are doing, but also how your sector is changing.
Secondly, you need to more deeply analyse your main competitors, looking hard at what distinguishes each of them: what they do to differentiate themselves, and how those differences are perceived, and what they do well and what they do badly.
Thirdly, you need to assess each of their core services or products against which you may compete. And finally, you need to create a clear list of each of your key competitor’s strategy along with details of its effectiveness.
Now you have an invaluable measure, against which your organisation’s offering will be assessed by your target customers. And a ‘map’ of the ground in which you need to find your unique path.
The next step is to think of new strategies that might work for your business. What matters most to your target audience that current organisation could – and should – be delivering better? Perhaps there is a corner of the market that is being under-served by your competition. Or perhaps there is a unique strength that your organisation can bring to the market which others lack.
One of the most effective ways to define a winning strategy is to talk with your target audience. Find out what they really feel about the products and services available on the market, how they think they could be better served, and what better products or services might look like.
Differentiation that you can truly deliver is the key.
You don’t need to be the best to compete
Consulting firms often advise organisations to shed any business for which they aren’t among the market leaders. The fact is, to compete successfully you don’t need to be the market leader. But you do need to find a way to sharply differentiate yourself from the competition, that leverages your strengths.
Although it may be difficult, the winning strategy for your organisation and sector could most likely be surprisingly simple. It’s advisable not to overthink your strategy and be determined to come up with a complex solution if a simpler answer is staring you in the face. In almost all cases, the simpler solution is easier to deliver and more effective in the long-term.
That said, don’t just latch onto the first differentiated strategy that seems to suggest itself. You will most likely find yourself considering several strategies until you discover the one that works most powerfully for you.
Alternatively, talk to an established brand agency that specialises in your sector. Ask about our Brand Builder programme >