Sustaining a competitive advantage

Sustaining a competitive advantage
Key takeaway:
A competitive analysis is essential to understand the challenges impacting on a business, and
therefore the best strategy to deal with them.
What We Covered:
Basically the three main ways in which your clients can compete in the marketplace are:
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
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On price
By serving a niche market better than anybody else and,
On the individuality of their product or service
We discussed the merits of each of these so that they could choose the one that is best suited to
their achieving their vision.
We then looked at the 5 forces that can prove to be obstacles (as identified by Michael Porter).
There was a heavy emphasis on the importance of a SWOT analysis to better position them to deal
with these issues.
Operations Reform Offers Cost Advantage
Support Resources
This BGR should generate a lot of interest in the idea of gaining sustainable competitive
advantage by achieving both cost reductions and product differentiation (though we
concentrated on product differentiation in this BGR). A precursor to achieving anything in
these areas is a business diagnostic to assess where the business sits in relation to
competitors, what market opportunities there are for it, what its capabilities are and how it
could differentiate its products – in other words an Advisapedia or Business Diagnostic
engagement. There were numerous pushes for this. Subsequent discussions with clients
should be based around this.
The webinar also covered the importance of getting information from the horses mouth – the
customers. We spoke about the benefit of Customer Advisory Boards/Focus Groups. As an
advisor, you are in the best position to facilitate this process. Use Advisapedia’s Customer
Review diagnostic.
Charter Partners Accounting + Business Advisors
Phone: 1800 810 247
| Gympie | Bundaberg | Brisbane (visiting) | Maroochydore (visiting) |
Differentiation Provides A Sustainable Competitive Advantage
Support Resources
Porter, Michael, 1980, Competitive Strategy: Techniques For Analyzing Industries And
Competitors
Being able to deliver benefits that exceed those of competing products, i.e. using a
differentiation strategy as a way of providing competitive advantage, is one of the points
made by Porter in this extremely influential book. It is a must read for business strategists.
However, if time doesn’t permit this immediately check the information at QuickMBA below.
Competitive Advantage
http://www.quickmba.com/strategy/competitive-advantage
A succinct overview of Porter’s ideas on how competitive advantage works. From the
QuickMBA site.
Charter Partners Accounting + Business Advisors
Phone: 1800 810 247
| Gympie | Bundaberg | Brisbane (visiting) | Maroochydore (visiting) |
How Competition Works: The Five Forces
Support Resources
Porter’s Five Forces
http://www.quickmba.com/strategy/porter.shtml
What the five forces are and how they work together to determine the intensity of
competition. From the QuickMBA site.
Beat The Competition
By Kim T. Gordon
http://www.entrepreneur.com/marketing/marketingcolumnistkimtgordon/article34076.html
A practical example of how to look at strengths and develop value adding differentiators
based on these so as not to have to compete on price alone. From the Entrepreneur.com
site.
Support Resources
Barriers To Entry
By Norm Brodsky
http://www.inc.com/magazine/20011001/23475.html
A case study of a successful firm that used the strategy of starting out in an industry that
had low entry barriers, and then moved into another with much higher entry barriers. From
the Inc.com site.
Charter Partners Accounting + Business Advisors
Phone: 1800 810 247
| Gympie | Bundaberg | Brisbane (visiting) | Maroochydore (visiting) |
What’s Happening In The Business Environment?
Support Resources
PEST Analysis
http://www.quickmba.com/strategy/pest
A range of environmental factors that can affect levels of competition. From the QuickMBA
site.
Benefiting From Competitive Analysis
Support Resources
Know Your Competition
By Carolyn Z. Lawrence
http://www.entrepreneur.com/article/14020
Some case studies of the value of competitor analysis and an extremely sensible and
practical introduction to (mostly) readily available information sources for competitive
analysis. These are US sources but the principles hold good elsewhere e.g. local chambers of
commerce, or there are equivalent sources e.g. to lists of trade magazines in a country. From
the Entrepreneur.com site.
GOOGLE ALERTS
Use Google Alerts to keep you in touch with what’s happening in your industry, what people
are saying about you, your products, anything that helps you stay abreast of the things you
need to know.
Set up searches easily at http://www.google.com/alerts
Charter Partners Accounting + Business Advisors
Phone: 1800 810 247
| Gympie | Bundaberg | Brisbane (visiting) | Maroochydore (visiting) |
Search For Differentiators
Support Resources
Our next BGR DIRECT webinar is on this topic. You should make it a priority to get as many
of your clients along.
Which Strategy?
Support Resources
Porter’s Generic Strategies
http://www.quickmba.com/strategy/generic.shtml
An excellent, brief rundown, on the three generic strategies for addressing competitive
pressure and how they interrelate. From the QuickMBA site.
Charter Partners Accounting + Business Advisors
Phone: 1800 810 247
| Gympie | Bundaberg | Brisbane (visiting) | Maroochydore (visiting) |