Business Differentiation Ingredients
If you don’t have a competitive advantage, don’t compete.
- Jack Welsh
We have found many businesses that cannot articulate how their business is truly unique. What analogy to this situation stands out in our mind? We feel that trying to win against your competition without good business differentiation is like trying to sail with no wind.
So how do you derive good business differentiation? To create strong value propositions for your business, consider the following:
There are two ways to win in a competitive market:
- Achieve sustainable lower cost (and therefore price) than your competition for the same products and services (very difficult)
- Deliver more value, despite equal or higher price
A business is a value delivery system. Do you know the ‘value experiences’ your business delivers? Do you know your targeted customer segments?
The heart of a winning value proposition is the end-result experiences of value a business intends to deliver to its target customer segments. It needs to be articulated for the customer value end state … not for your product, service, or business process.
Be your customers … study and creatively infer value by observing / learning from what they do.
Do your claims surpass the value alternatives in the market place? Do your customers believe your claims? Does your value differentiate you in the customer’s eyes?
Can you validate and deliver your value proposition?
Is it sustainable, at least in the near term?
Is it simple, clear, and specific?
When your customers have customers, different value propositions are required for different players in the value delivery chain.
Every business has a value proposition … either implied or explicit. Implied value propositions usually mean little to no discrimination versus your competition. NOT a good business proposition!
Please share an experience or two with your business value proposition.
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Six Business Lessons Learned From the Bamboo
Mike is available for speaking commitments. For local area business clubs many can be done at no expense to you. To inquire, contact him at 607-725-8240.
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