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Staying Competitive: Are You Building the Right Advantages?
by Harvy Simkovits, CMC, Mr. Business Wisdom
In order to determine and build your best competitive strengths, assess these factors below in terms of what you see as your company's competitive advantage, i.e., why buyers are buying from you and not your competition.
How much do customers buy from you due to these "C1" factors?
How much do customers buy from you due to these "C2" Factors?
How much do customers buy from you due to these "C3" Factors?
Which set of these factors (C1, C2 or C3) do you most want to be known for by your customers? If you are not sure how your customers see you now, then use the above questionnaire to ask their opinion of you.
Based on the above factors,
If your company is just competing on building and improving your Competency/Capacity, then you may be viewed by your customers as just a Commodity Vendor who can be easily replaced. Competencies/Capacities can always be, in time, matched by your competitors. Your company may have important talent, experience or expertise, yet those can always be duplicated or bought over time. Thus, you can become easily "commoditized" by buyers who choose vendors based on price alone.
If your company is competing on Credibility (in addition to Competency) then you are building strong human bonds between yourself and your customers, and will be viewed as a Trusted Supplier. However, your customers may not remain fully tied to you, replacing your company if a competitor offering greater value comes along.
If your company is competing on Capability (as well as Credibility and Competency) then you provide a business-to-business "experience" and value that cannot be matched. You will then be viewed as a Business Partner, with a dynamic interdependency (business ties that bind) between you and your customers which link you closely together.
So, going back to the list of factors, which ones do you want most to compete on and build into your organization?
*adapted from Tom Wentz, Transformational Change: How to Transform Mass Production Thinking to Meet the Challenge of Mass Customization, Corporate Performance Systems, Inc. 1999. Original seminal source is Competing on Capabilities: The New Rules of Corporate Strategy, by George, Jr. Stalk, Philip Evans, Lawrence E. Shulman, Harvard Business Review, March 1992