Does your business have a sustainable advantage?
Having one or more sustainable advantages gives you an edge in the marketplace.
Advantages can be developed in several ways. Perhaps the most commonly sought after advantage is price. However, a price advantage is rarely, if ever, sustainable. Another business will find a way to offer a lower price, even taking a loss sometimes on that one item. Our landscape is littered with businesses that relied on a price advantage.
Another means to gain the advantage is in the use of rare elements, talents or processes. The outside shell of your automobile is such an example. Companies gained an advantage in developing a special process for bending and molding sheet metal. Then aluminum came along followed by fiberglass and now we have plastics and carbon fiber. All of these initially required an expensive and somewhat unique process to form the body of a car. But over time, the process got cheaper and more companies decided to use it. And so the advantage was lost. Not only was the advantage lost but some companies got attached to the old way of doing things and got left behind.
Another advantage used by some companies is to hire the best personnel available. Sometimes this works and sometimes it doesn’t. A management style that works at one business might not fit with another business. Also, there are always new people coming along looking to challenge what works. Plus new technologies and tools leave the old ideas behind.
Two more recent advantages companies have adopted are free shipping and overnight shipping. Again, these gave a temporary bump to a company but a scan of the marketplace finds they no longer make your company unique.
I recently heard about two more advantages that companies are trying. While they offer some temporary advantage, I suspect that neither will be sustainable.
The first was when United Airlines gave a $10,000 voucher for a customer who was booked on an over-sold flight. It was a satisfactory means of customer service perhaps but did they just set an impossible standard to maintain. Who made the call and will everyone be treated equally? Stay tuned to this one.
The other one, by Ace Hardware, says if you buy supplies from them for a painting project and then need something else or more of something, they will deliver it for free. How often I have needed more paint or tape or whatever in the middle of a job. Sounds like a good idea. Time will tell if this gives them an advantage and if it is sustainable. I suspect that the speed in which they can respond will make or break the idea. If I am in the middle of painting, I will want things quickly. And then there is the issue of sustainability? This could be something other businesses could easily duplicate.
As you think about sustainable advantages, there is one more thing to consider. As mentioned, sustainable implies a time horizon. My comments have looked at it over a long period of time. Perhaps though you only need it for a month or a year. Then sustainable is much easier to get and maintain. It also implies you are planning for what will your next advantage. You may decide to break a big change into several small changes each of which give you a new advantage.
Having an advantage makes your business memorable. Maintaining the advantage brings long term success.
- Going Outside the Box When Operating Your Rural Grocery (or Other Rural Store) - April 25, 2018
- Work/Life Balance - April 18, 2018
- A Sustainable Advantage - April 11, 2018
- Narrow the Gap - March 28, 2018
- It’s Time - March 14, 2018
- Go Where Others Fear to Tread - March 7, 2018
- Balance Your Marketing Presence - February 28, 2018
- The TRUTH About No-Cost Marketing - February 21, 2018
- What’s Holding You Back? - February 14, 2018
- Involving Family in the Business - February 7, 2018