Be Strategically Positioned OR Operationally Effective?
When it comes to gaining competitive advantage or placing your business as a competitive entity in your industry, there are various strategies to make use of, some obvious and some not. In my opinion, most businesses just want to sell their product and make profit, very few of them are concerned about placing their business in a competitive spot, what I really mean is that although almost every business thinks there is a competition, only few have strategies in place to gain competitive advantage over the competitors.
Wait! Am I the only one that thinks the title of this article is “dope” ? ???? . Okay, maybe am alone on this one!
Back to business. I believe which ever strategy you decide to make use of, they always almost fall under these two umbrellas: Operational Effectiveness OR Strategic Positioning.
This strategy entails you doing the same thing your competitor does but doing them “better”. Few examples of ways to do things better than the competitor are :
- Having better technology
- Having superior inputs
- Having better trained people.
- More effective management structure
Even though you may sell the same product or offer the same value your competitor offers and there isn’t a lot of changes you can make to the product to make it standout – the operational effectiveness strategy tells you that you can use better up to date technology in your business that the competitor either doesn’t know or makes use of ( e.g a quick research on your competitor’s online presences may show that their website is not mobile friendly. You can use better technology to outplay them in that aspect by providing a more user friendly and responsive website because the majority of online searches for a product are done on mobile ) As you already may be able to tell, this strategy focuses more on “doing things better” than the competitor, I believe a combination of People, Process , Technology and proper Planning will win the day.
There is one thing to note though. The Operational effectiveness strategy can be used when your business and the competitors is somewhat on the same level in terms of monetary power or market share. I had an experience one time where a small business was trying to startup an online marketplace which will compete with Amazon and eBay.
My advice to them was “Let’s not fool ourselves here, those are big players, they’ve got large market share and strong monetary power to run paid adverts and kick your butt, what you should consider is – Strategic Positioning”
This strategy involves doing things differently from the competitor in a way that delivers a “unique” type of value to the customer. In my opinion, it can also be called “The Niche Strategy” whereby you position your business in a place in the market where the value it delivers is different from the competitors. Although you run almost the same business but the value you provide is unique.
Let’s take the example of the small business above who wanted to compete with Amazon and eBay. The reason I advised them to follow this strategy is because they can’t possibly win Amazon or eBay in the online marketplace business but they sure can become a brand and gain competitive advantage over them by creating an online marketplace that provides a unique value to their customers. Amazon and eBay are known for having products from ALL categories why not create an online marketplace that provides a unique value to customer, say an online market place that sells X products to X type of people.
If you can’t beat them with Operational effectiveness because they are big players, you position your business in a strategic position in the market where your business provides a unique value to the customer and you can build a brand for yourself in that segment.
Article by Daniel Damilola Nejo ( www.presidentialideas.co.uk )