Strategy: How to outcompete the competition, finding sustainable competitive advantage

 Sustainable Competitive Advantage 

Few companies can lay claim to that holy grail market position for any length of time. Here are some that come immediately to mind: Ferrari, Rolls Royce Engines, Hoover, Apple’s Iphone and Ipod, Boeing, Walkman, Sky, Microsoft Windows, are all good examples of companies who have achieved, or are holding it today.  Sustainable competitive advantage is the ability to create and sustain a position within a market. Sustaining a desirable market position provides long-term competitive posiitoning for that brand.

The competitive advantage most companies strategically aim for is to own the space of early adopter within an adoption curve. That position, where brands are seen as premium players, producing innovative new products and services and able to command and earn premium prices for those products. That premium position, finding, and holding the early adopter position in any market is seen as the optimum competitive advantage position within any market.

By finding that competitive position, and often helping creating the market structure, a brand takes ownership of that the competitive position and often drives the development and evolution of the market.  A company can choose to operate anywhere within a market and make it competitive if they build their business model to a defined market position.

Making it Sustainable

Making a competitive position sustainable requires a brand to develop its ability to sustain its position over the long term. That sounds easy in theory, but in reality is hard. Short-term attitudes in growth and profit can easily distract a leadership teams focus. Failing to invest in sustaining their brand’s market position, or stakeholder demands for profit taking are two of the most common pulls that destabilise a brands’ established market position.

The challenge for any leadership team with their business is to be able to see the market position they want and then to take hold and hold onto that market position. Sustainable competitive advantage, the holy grail of a successful business is not easy to find, straight forward to own or simple to sustain, and that’s why it is every leaders’ holy grail.

How to Outcompete the Competition 

In mature (and often saturated) markets developing a unique strategic position can give a business sustainable competitive advantage. A sustainable competitive advantage in any market is the holy grail for business owners. To be somewhere that your competitors aren’t, and to have something that cannot be taken away, is what every business leader wants to achieve in setting up in business, and  dreams of achieving. It is one clear defining way of out competing the competition is to develop a sustainable competitive advantage in a market.

Dyson Vacuum Cleaners

To be recognised as the market maker, such as Hoover, whose name is synonymous with vacuum cleaners, gave the Hoover brand unbelievable control of the market for most of the 20th century.  Hoover, the brand leader owned the global market, with an unparalleled history, and complete market dominance. The brand name itself became synonymous with the product category, everyone hoovered their house with a Hoover.

So what changed? A loss of focus and desire to continue to own the market coupled with the airplane ticket fiasco which opened the door to new competitors and to one man in particular James Dyson who grabbed the opportunity to replace Hoovers’ once held position in the market launching his own Dyson brand through technology shift of his cyclone bag less vacuum.

His passion, created from vacuuming at home and becoming frustrated, seeing the cyclone idea at a sawmill which then took 15 years, 5,127 prototypes to turn into a winning product. Today this winning product benefits upon 60% recommendation purchases and has allowed Dyson to spin his cyclone technology into hair and air dryers as well as washing machines.

Features of Strategic Competitive Advantage

What are the key features of sustainable competitive advantage for any company in their market, well here are the most commonly found top five:-

  • Charge a premium for its services; even low cost suppliers out price other low cost suppliers.
  • Lead the market through innovation; will get to market new ideas quicker or in a more dominant way to shift the market to your agenda.
  • Controls the key channels to market; from buying decision processes to pricing structures.
  • Owns the pace of change within the market; from technology development and consumer mind set, being the pace setter in the market.
  • Control of buyer activity; the significant majority of the Share Of Buy (SOB) and Share Of Space (SOS) decsions through its dominance.

Sustainable competitive advantage is an extremely difficult goal. Most successful brands only ever achieve the challenger market position, one that challenges existing perceptions within a market. Developing a sustainable competitive advantage requires an organisation to constantly challenge not only the competition but also itself, to sustain its desirable position within its market.

Creating dominant sustainability requires the leadership to create a clear vision of where the company is going and where the market opportunity exists.  It takes leadership with passion, dedication and drive for a brand to succeed in moving from a challenger brand to one which can dominate and sustain that domination of its market such as Dyson. For men like James Dyson the advantage was that he was in the right place at the right time, with the right product.  That has enabled a technological shift in the market with his bag less vacuum and a move to smaller cable-less products dominate the innovator position within the market.

Learn More about Strategy

If you want to develop your company’s position then there needs to be a vision for it. Where it is going and why. If your look for some advice on developing your company, its marketing, its sustainable competitive advantage then contact us at Cowden Consulting to see how we can assist you, or read more about us in this blog or at Cowden Consulting.


Strategy The Leader's Role By Richard Gourlay

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Strategy the leader's role book by Richard Gourlay

A good business starts with the end in mind.

Here’s a simple question to any business owner, why are you in business? The flippant answer I often hear is to make money.  An honest, if not inspiring answer, but there is a fundamental flaw in that statement which many business owners fails to comprehend. They start a business, typically through experience in, or a passion for the field or because they have seen an opportunity to make money, but fail to achieve that ultimate goal because they fail to plan their end game, their exit strategy.

If you can’t get out making the money you intended to when you sell up then why did you set up the business in the first place? You have a great idea, you work on it, and spend your energy (and life) building it until it becomes you. It succeeds and you enjoy the lifestyle it brings then the challenge of maximising that income to free yourself up and retire or dd something else with your success.  That final stage often becomes impossible because you are the business and it is you, its lifeblood, main cheerleader and driving engine.

This typical scenario of being a business owner, is driven by the passion to run the business day-to-day overshadowing the failure to plan your exit strategy from the start. That is building a business with a clear objective to enable the owner to get out and maximising your income from what you have achieved. Nearly all business owners focus on building a successful business, not on making sure they maximise their returns from the successful ownership of the business.

The real payback from all that hard work in creating and setting up a business for an entrepreneur is the final payback, it is in the shareholder value being realised by a sale of that business. Few owners think about realising their shareholder value, being more interested in the Profit and Loss than the Balance Sheet when making key decisions about the business. That approach is effectively summarised in the phrase; the turnover is vanity, profit is sanity and cash is king, a great motto in the running of any business, but it does not hold true in achieving exit strategy success as a business owner.

Achieving shareholder success is the only motto to follow if you want to have a saleable asset, then owners need to focus of developing an exit strategy which achieve their personal goals.  While profit and cash rule the day, building a valuable asset requires building shareholder value, through building sustainable long-term profitability

Success in business requires owners to build a business which you own but are not concreted into the foundations of its success. Building a forward strategy for your business is a vital first step in building your exit strategy, it is the old adage that you need to work on it not in it which underpins all successful entrepreneurs.

Short-term profitability is always an important goal, but long-term share value is a strategic consideration which owners need to consider in building the value of their business. If you would like to discuss this article further or further information about our services in working with business owners in achieving  successful exit strategies then contact us at enquiries@cowdenconsulting.com or see our contact page for further options.

Like to learn more about leading a business then click here to buy the book with all the tools you need to become a better leader: Strategy The Leader’s Role by Richard Gourlay

 

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Richard Gourlay provides advice and support for business leaders to grow and develop their business.

The power of WHY to consumers

 Will they BUY? 

In the old days people used to buy what companies did, what they made, where they sold it and bought what they promoted.  That was the age of big marketing and sales budgets, when big adverts worked, by driving demand through pushing products down channels, offering promotion and celebrity endorsement to generate business.

The age of the Unique Selling Proposition ‘we are special because….. so you will buy’! It was the 1980 and 1990’s so the world did as it was told: “we make what you want because we tell you want you want because we know about your needs”.  This relied upon trust in a brand by the public, which in a pre-internet world gave the control of information to the brands.

Trust, the intangible combination of character and competence which all successful brands must develop and sustain is mad cup of a whole series of elements itemised below.  The importance of ethics in today’s business are essential characteristics which purchasers expect their brand to portray in all their activities. That makes it a key priority for leaders’ to focus on within their role.

 

Honest is essential

Then ethics came into play, as the age of information came into play in the early years of the new millennium. As the internet began its infancy, the power of globalisation was laid bare by the internet. People asked more about how companies did things? Where were products sourced and how became important. Why were the premium footballs, such as those which David Beckham kicked, being made by blind children in India for a few rupees. Why were the clothes models wore being made in sweat shops where workers earned less than for a dollar a day?

The internet changed how the media could communicate, explaining how household names operated and could afford those huge marketing budgets. This forced companies to change their practises (and their internal policies) by educating and fighting back against the likes of Naomi Wolfs’ No Logo expose for example.  The brands who recognised that they could no longer hide their activities became more open and honest and developed trust, while those which did not, suffered public shaming and demise.

How business operated mattered, and so in response companies upped their awareness of their social impact and visibility through corporate social responsibility. How people did things mattered not just when the likes of Bhopal and Exxon Valdez disasters struck, but in everyday life.

Fair-trade has become a household name in consumer goods, with high street stores vying for credibility of having an ethical policy, supporting local goods and having transparent policies of how they operate. This gives more confidence but leaves companies open to further scrutiny and often to unsatisfactory answers to vital key questions, not at least within developing countries, who are now the fastest growing emerging markets for many brands.

Ethically; should I buy from you?

The biggest question which consumers and business now asks people is why businesses are doing these things.  Everyone has become so empowered with information sources that people want to buy the WHY, not the what. Buyers want to understand the ethics of the company and importantly the people behind the decisions it takes. Customers want to know that these decisions accurately reflect the real cultural and values that company has, not just the marketing hype, which the brand portrays. Today this is the real power of the internet.

What’s the real purpose of the company, who and what is driving it and what does it really believe in and stand for. No longer is a small donation to a local charity enough to say it supports the community, customers want to know how much, who gets involved, is it company wide and deep or just a year-end tax saving. In today’s world the importance of ethics in today’s business cannot be understated for leaders to focus upon in their role.

Ethical Values Being Lived

In fact the world has changed completely, confidence comes not from what you say but why you are saying it. The educated and informed world means that it’s not just politicians who have seen their reputation tarnished but any business in any sector who does not explain it why factor.

It snot just whistle blowers who expose mal-practice in today’s world, everyone is communicating through so many channels, from traditional word of mouth, through social media and beyond into a connected world, where reputations must be transparent. As everyone’s voice matters, being ethically transparent, open and honest is now essential if a brand is to be trusted.

Winning customers is no longer all leaders have to focus on. Finding talented staff, channels partners and customers is now a multifaceted challenge for leaders to deal with. Ethical short-cuts damage brands reputation and those damaging allegations now stick, and become magnified to stakeholders as statements are now online, like a bad trip advisor review, it never goes. A tarnished reputation is exactly that.

No matter what sector you are in, understanding the still emerging power of the internet in sustaining your reputation is essential and never more so than in explaining why you are in business and why you matter. The importance of ethics in today’s business has never been so important to establish and maintain.

Like to learn more, then contact us at Cowden Consulting or see our website or social media channels for more about Cowden Consulting:-

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Our services: business planning, strategic planning, business development, strategic marketing, Return on Investment, director development, director mentoring.

Cowden Consulting works with business leaders throughout the UK to improve their business.

strategy, leadership and vision in business by Steve Jobs

Values matter in BUSINESS more than ever

Values must be transparent

The way you provide your product or service and to whom, says more about you than how much business you do. Being big in a highly segmented world is no longer the determination of success. How you do your business now determines your current credibility and future success. Credibility is as much about your values in becoming successful as about the success you have. Mohamed Al-Fayed for example, despite buying Harrods, never shook off questions about his background.

Your values as an organisation as demonstrated by everyone inside your organisation matter to both existing and potential customers in choosing to do business with you. People have choices and they can now exercise them more freely than ever before, and that means customers can access information instantly to make choices that are more informed. Ikea’s staff misinforming undercover Times reporters about their sustainable and certified sourced products at a number of shops are one symptom of Ikea’s rapid growth boardroom culture.

Values Must Live the Moment

Almost everything in life is in real-time and instantly communicated to circles of influence and beyond. A restaurant having  bad night can have a poor reputation before the starter has even been cleared away as customers post live feed back to sites such as Qype or Trip Advisor . Therefore, before the waiter, maitre d’ or chef knows what’s happening the world outside already does by Twitter and Facebook and are cancelling their reservations in their droves.

Why clean lavatories matter?

The old adage that if you want to know how clean the restaurant kitchen is, inspect the lavatories, because they tell you how the restaurant values cleanliness, is a great example of modern customer awareness. Do you live your values or just post them on your website? Is the question customers want to know in establishing and experiencing trust with you and your brand.

Rail companies learning fast

The recent story of the man on the train talking too loudly causing enraged customers to Tweet  complaints about his behaviour which was picked up by a duty manager hundreds of miles away who then contacted staff on the train to track down the loud caller and asked him to quieted down.
This story is very much testimony to the growing demands of customer expectations, immediate online response, not waiting for passing train staff to react. This story is part of the reputation shift that train companies are actively pursuing.
The values that a business lives really matter to customers and to the brand reputation. Learn more about strategy and how to build yours in your business, click here or on the book below.
Strategy The Leader's Role By Richard Gourlay
Strategy: The Leader’s Role by Richard Gourlay
Taking strategic action to improve your business startup success

Where Does Tomorrow’s Business Growth Come From?

Where does tomorrow’s business growth come from?

Business growth is not an accident. Why some businesses succeed and others do not is not by chance. Busienss growth requires leadership to plan out where they are going within there market.  All markets change through both evolution and revolution (think of those disruptive players in any market and the impact they have.)  This slideshow explains why it is important for leadership to use business planning tools to effectively plan their growth.

In every market there is always new opportunities always arising. Markets do not go up (or down) equally. Some segments and individual customers grow faster than others due to their strategic or tactical successes. Knowing where external and or internal market factors are influencing or driving segments within any market is the vital strategic insight which leadership teams need to understand.  Even markets declining do not do so at equal rates. Change happens in every market so knowing where to look for positive changes within any market is a key skill for leaders to learn.

Being successful in business is all about seeing the bigger picture and understanding future growth. For a business to grow and develop, the leadership team must invest time building it. That requires the leadership to step back from the day-to-day operations of the business and focus on working on the business. Like to learn more, click the slide presentation below to learn successful leaders work on their business to find growth.

Where does tomorrow’s growth come from by Richard Gourlay Leadership must think strategically if it is to be successful in growing its business.

Leadership is all about VISION

Leadership IS all about Vision

Successful leadership is about having a clear vision.  A vision is a is a mental picture of what you want your business to be at some point in the future. It is a realistic aspiration. That vision gives a business a clear focus and a long-term direction, and it can stop a business heading in the wrong direction.

Great leadership is about planning your business using business planning tools to match their ambitions to the opportunities in their market. Without a vision, businesses often fall into short-term annual plan, rather than long-term sustainable entities.

Creating a Vision

Successful business owners step back to work on their business not in their business. Looking at where they are going and why. A vision is an essential element in a leaders toolkit in communication with all stakeholders and employees. It is about being more than just a product or turnover. A good vision must combine not only an aspiration but elude to the values of the business.

Good visions also aspire to where the business will provide value to customers in the future. What are the opportunities within your market and sector over the next few years. Business Planning is a process of assessing options using tried and tested business planning tools, which provide robust and accurate options for business owners to grow their business successful.

Leadership is all about VISION from Richard Gourlay