What is your sustainable B2B competitive strategy?

Throughout my career as a B2B business strategist, I have frequently turned to Michael E Porter’s ageless writings on Competitive Strategy for guidance. His book “Competitive Advantage: Creating and Sustaining Superior Performance”, was originally published in 1980. The book was pre-dated by Porter’s 1978 and 1979 Harvard Business Review (HBR) articles on the concepts of strategy and competition – the articles were updated and republished in 2008.

 

 Michael Porter’s classic analysis captures the essence of competitiveness, and in the process, maps out the basics of what a market-driven business strategy should be. At the core of the strategy development process, lies a quest to answer a very simple question: “What is your sustainable competitive advantage?”

The answer might seem straightforward to some but most companies cannot articulate it in a concise company mantra.

 Porter decants it all to a very simple binary state of competitiveness. A company either positions itself as a price leader, leveraging the scale of its operations  (Wal Mart, Costco) or elects to differentiate itself to bring value to a niche group (Rolex, Mercedez, etc.).  In other words, one competes on either price or on some perceived added value. He warns of getting stuck in the middle. Here is an excerpt from the book:

“The firm stuck in the middle is almost guaranteed low profitability. It either loses the high-volume customers who demand low prices or must bid away its profits to get this business away from low-cost firms. Yet it also loses high-margin businesses – the cream – to the firms who are focused on high-margin targets or have achieved differentiation overall. The firm stuck in the middle also probably suffers from a blurred corporate culture and a conflicting set of organizational arrangements and motivation systems.”

Successful companies carve out effective long-term differentiation strategies that provide a sustainable competitive advantage and that supports and that drives everything they do as an institution. It defines the company culture; its DNA.

The differentiation is not necessarily linked to product functionality or features. Many examples exist of companies that have differentiated themselves on quality, reliability, faster delivery time, luxury versus commodity, after sales support, distribution, marketing, sales channels, etc.

I see more recent works on strategy, such as Blue Ocean Strategy, as expanding on Porter’s principles, offering tools to help determine the elusive competitive advantage. Having Quebec roots, I particularly like the Cirque du Soleil case study, of how one goes about redefining the market (an ultimate differentiation strategy that drives to extreme levels of success). Apple, is of course another example of a company that catapulted to success through an effective differentiation strategy.

TechMark Global Approach

Determining what will make us different in the long term is of course not so easy to accomplish. It’s seems evident with hindsight but not so easy to determine. It requires a comprehensive understanding of the product or service, of markets and market trends, and of the competition. Most smaller-sized companies typically have a gut-level feeling of what makes them different. In a way, they often times have a blurry vision. They feel they have something but they just can’t translate into effective business strategy. That is the value that TechMark Global brings. We quantify the vision in a way.

By drilling to the core, we carve out the key elements of competitive strategy. We then secure its effective execution through the establishment of a corporate culture – and necessary core business processes – that makes the competitive strategy its vital focus.