The Critical Factors in the Growth of Your Business

The Critical Factors in the Growth of Your Business

Good news: many of your rivals are too chicken to implement a strategic advantage. One name for this fear is "strategophobia." There are two very disturbing aspects to strategies. To begin with, strategy is a decision. In other words, "the main benefit we will offer consumers is Z and not all sorts of other things," or "we are going to go for target customers X and not the rest."

When making a decision, it seems like you always have to sacrifice something. Some business leaders insist on pursuing a specific demographic of clients as if they already "have them" or can easily win them over. This is one of the managers' most delicious but perilous delusions. They are reluctant to single out one advantage as the primary perk they offer for fear that consumers may look elsewhere if they do so. When you employ strategy, you consciously decide to channel your efforts in a concentrated manner to get a competitive edge. You accomplish this by proving that your brand is the best option for fulfilling a particular need. If you don't, people won't associate you with anything positive, and they won't have any incentive to consider you or buy from you when they have a need or want.

When you commit to a course of action, you sacrifice (or "give up") a lot of things you don't have in order to gain something you can hold in your hands and chew on.

Differentiating oneself from the competition is the second scary aspect of strategy. To be really honest, that's the kind of thing that gives normal people nightmares. Why? The primary reason is that conventional conservatism dictates that if something is universally practiced, there must be some merit to the practice. That is correct. The element of "good management practices," something everyone aspires to, is crucial. 

It's crucial, but it won't give you a leg up on the competition, and you shouldn't confuse it with strategy. In addition, managers spend the majority of their time worrying about how to keep their competitors from acquiring an advantage rather than how to gain one themselves. As a result, those managers are preoccupied with striving for parity rather than originality. A strong defensive effort can keep you from losing the game. However, scoring on a regular basis is essential for success.

You'll need a plan to accomplish this. I’m afraid there isn’t any other option.

That Extra 5% Can Change everything

A strategy is the means by which one intends to accomplish one's objectives. To succeed in a cutthroat market, you need customers to choose you over the competition. Therefore, a strategy is the means through which one intends to gain an advantage over rivals in the eyes of consumers. To get a competitive edge, differentiation is typically required. You need to distinguish yourself from the competition in a way that gives your target audience a compelling reason to choose you over the alternatives.

Many marketers mistakenly believe that to differentiate, a business must be fundamentally different in every way from its rivals. To the contrary. The good news is that you do not need to be exceptional in every way to achieve success, just in some. It doesn't matter what industry you're in; if you compare the worries, decisions, and daily routines of the managers of competing companies in the same market sector, you'll find that they're remarkably similar. Perhaps unexpectedly, high-level managers of rival firms are remarkably similar in their day-to-day operations. This is the "good management" we were referring to earlier.

Take cellular company CEOs as an example; if you conduct individual interviews with each of them and ask what matters most to them, you'll likely hear something along the lines of "I must have great client service, a flexible and efficient billing system, and great added value and content services." Everyone will give the same response since it is what customers have come to expect from reputable cell phone providers. A good management style, however, is not a tactic.

If all businesses perform the same function and possess the necessary skills, would there be any reason for customers to choose one over another? For what reasons should they choose your firm? That's why you're the best at it. There is almost little likelihood that customers will recognize "better," and it is not an advantage that can be sustained over time.

The other 5% have the key. Your approach is based on the 5% of things you do differently from the competition. Remember that humans and chimpanzees share 98% of their genetic makeup, so if 5% doesn't seem like much, consider that. If 2% can make that much of an impact, then 5%, well-planned, may do considerably more. You may be familiar with terms like "positioning" (your company's standing in the consumer's mind in relation to the competitors') and "critical success factors" (the absolute necessities for success in your area), but these terms are more closely associated with effective management than with strategy. 

Differentiation and placement are not the same thing. When consumers weigh their options, they utilize a variety of criteria to narrow down their choices; this is what we call "positioning." Definition: Differentiation is what makes you unique. There is no basis for comparison because it is a fact unique to you. The key to success in a competitive environment is good management. The consumer is the ultimate winner when you employ a winning strategy.

I'm going to use an unorthodox but hopefully illuminating example to explain the 5 percent difference principle. Bear in mind that I am not trying to make this company sound better than it is.

Naked News, a Canadian news organization, airs positive, up-to-the-minute news and current affairs shows around the clock on the Internet, as VOD on cable and satellite TV, and on mobile phones and other portable devices in more than 170 countries.

Managers and employees at this news organization perform largely the same things as their peers at other news organizations around the world. Some people, however, are willing to pay extra for Naked News since it offers something that other news programs don't. Naked News, often known as "the channel with nothing to hide," features gorgeous anchor people (mostly young women) who report on the news, business, sports, entertainment, and weather while completely undressed.

Perhaps a less divisive strategy will better suit your needs. Not a problem. So long as the basic idea is correct.