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Ken Keller: Do This First: Set Your Competitive Advantage
by Signal
Do This First: Set Your Competitive Advantage
KEN KELLER
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SCVBJ Contributing Writer
Iattended a presentation given by a CEO. Following our first meeting a few years previously, I had made an introduction that landed his company a sizeable amount of profitable revenue. So, he knew me.
He was looking at me when he said to his audience, “Consultants advise us how to do things, how to implement things, but they don’t tell us what we need to be doing.”
My understanding was that he wanted help determining what the strategic options were available to his company, and then he wanted additional help deciding which strategy to implement.
The columns I craft this year will focus on the “what” to do for success. It’s not going to be a series of “how to” articles but rather, a laser beam on strategies to improve the focus, performance and results of your business.
I intend to write about people, processes, profits, revenue, alignment and growth. By the end of 2023, any CEO that implements even a quarter of what I suggest should be well on their way to a better place.
Successful businesses know precisely who their customers are, what they need and how they want to receive their product or service. But they also need to choose the correct strategy to maximize their value to the market. In the book, “The Discipline of Market Leaders,” the authors say:
“No company can succeed today by trying to be all things to all people. It must instead find the unique value that it alone can deliver to a chosen market.”
A company must take its “why” and choose the competitive strategy that best helps it offer its unique value. What is proposed are three primary competitive strategies: operational excellence, customer intimacy and product leadership. Let me elaborate.
Operational excellence is used in highvolume, transaction-oriented environ-
Product Leadership Consumer Intimacy
ments where fulfillment is standardized, and product differentiation has slight advantage. A primary focus is automation and speed, whether in manufacturing, distribution or work process. Customers who buy from operational excellence companies seek commodity products or services, low prices and high availability. Operational excellence companies include Wal-Mart, Amazon, FedEx and UPS.
A customer intimacy strategy focuses on the customization of products and the personalization of service to meet the customer’s individual needs. Success in this approach requires deep market and particular customer knowledge, including insight into their processes and their desired outcomes. Customers seek customer intimacy companies for high personalization and efficacy solutions, low risk, and are willing to pay a higher cost. And often wait for delivery. Companies using a customer intimacy strategy include Starbucks, Home Depot and Chick-Fil-A.
The third choice is product leadership, which aims to offer continuous superior value through products. Innovation, high quality and status are the attractions for their customers — and they are willing to pay a high price and endure limited availability.
Product leadership is the strategy for those companies bringing new product categories or “bleeding edge” technologies for early adopters. Examples of these include Apple, Disney Parks and Tesla.
Companies must actively compete in all three disciplines, but can only choose one to lead in. Knowing who you are and choosing the appropriate strategy to emphasize your value is foundational to having a competitive advantage worth having.
Which strategy will you lead your company with?
Ken Keller is an executive coach who works with small- and mid-size B2B company owners, CEOs and entrepreneurs. He facilitates formal top executive peer groups for business expansion, including revenue growth, improved internal efficiencies and greater profitability. Email:Ken.Keller@strategicadvisoryboards.com. Keller’s column reflects his own views and not necessarily those of the SCVBJ.
