Let’s face it – some companies are better than others.
Maybe the company has better brand image (or brands), larger market share, more innovative or proprietary products or some other attribute(s) that distinguish the firm from their competitors.
Let’s look at a few characteristics: Competitive Advantage, Above-Average Management & Market Leadership.
– Competitive Advantage
Michael Porter pioneered the concept of Competitive Advantage and later added to the concept with his follow up book, Competitive Strategy.
The theory of Competitive Advantage can be broken down into two components: Differentiation Advantage and Cost Advantage.
Differentiation Advantage – provide products/services that stand out from competitor’s products.
Cost Advantage – is to offer products/services at the lowest cost in the industry. The company still needs to earn an acceptable profit for the company and pull profits from the other players in the market.
Some other strategies would includes:
Innovation Strategy – introduce and offer new, unique and noticeably better products/services to the market.
Operational Effectiveness Strategy – operate your business better than your peers (i.e. make it easier for others to do business with your firm as opposed to your competitors).
– Above-average Management
The consistent quality of the company’s management team is a very important attribute. Experienced managers who apply company principles and values consistently (provided they’re good principles and values!) can guide the company through up and down and serve as mentors for the next generation of managers.
– Market Leadership
The label of “Market Leader” is one that every company aims for. Market leadership can come in different forms but the status that comes with it can be immeasurable. Examples can include quality, customer service or innovation.
Becoming and remaining a “Market Leader” is not easy. Most companies strive to be Number 1, not Number 2. If you’re in an industry with high barriers to entry (high capital costs, government regulation, proprietary products, etc.), Number 1 may remain that way.
These are just a few ideas that can differentiate one company from another. If your company can exhibit the characteristics above (Competitive Advantage, Above-average Management and Market Leadership), you should be more successful than your competitors!
Please contact me if you would like to discuss the above strategies, other financial/ operational issues or services I can offer (firstname.lastname@example.org or 704/651-2216).
The Danger Zone: Lost in the Growth Transition by Jerry L. Mills (available on our website)
Good to Great by Jim Collins
Competitive Advantage and Competitive Strategy both by Michael Porter
The Wall Street Journal. Complete Small Business Guidebook by Colleen DeBaise