Creating a Sustainable Competitive Advantage

There are several concepts you must consider to create a sustainable competitive advantage for your business and your brand. Here are some of them:

• Dream big. 
• You must have deep insight into your customers' values, attitudes, hopes, aspirations, anxieties, fears, needs and desires.
• Perform deep market segmentation analysis. This should include need segmentation.
• Discover customers' frustrations and pain points, things they wish could work better. 
• Address all of those frustrations and pain points. 
• Challenge your category definitions and your business model assumptions. 
• Consider vertical and horizontal integration.
• Consider product/service bundling and unbundling. 
• Drive your business off of proprietary systems, technologies and processes.
• Find a way to make your business scalable. 
• Create a business model that benefits from network effects.
• Your business and brand must stand for something and live consistently by a carefully chosen set of values. 
• Link your sales and marketing processes and messages seamlessly.
• You must say "no" to revenue sources that are not in your bulls-eye. Otherwise, you will become distracted and be taken off the game that you are best suited to win.
• Actively engage with your customers on a regular basis, even before revenue streams occur.
• Constantly reinvent your business model, products and services. Throw out what doesn't work and keep what does. In this way, continue to evolve. Your competitors will not stand still. 
• Stay in the business flow. Stay close to your customers and your markets and your competitors.
• Form as many strategic partnerships as possible. Always try to create a win-win situation.
• Do not try to steal share from competitors. Rather, focus on creating enhanced value with your customers and in the industry. Expand the pie rather than trying to take someone else's slice of it.
• Become an expert and a thought leader. 
• Play your own game. Do not get sucked in to matching your competitors' every move. 
• Craft your brand's story. Make sure it is emotionally compelling and purchase motivating. 
• Find the big influencers in your industry. Befriend them. Learn from them. Influence them.
• Always be honest. Never lie about anything. If you lose your trustworthiness and integrity, you lose everything.
• Remember, your business will only do well if it focuses on helping its customers, employees and business partners. Organizations thrive because they are meeting real needs and helping others achieve their goals. 

Ten Sources of Potential Share Loss

Don’t ever be satisfied with ‘business as usual.’ There are always others in the marketplace trying to create the next ‘killer application.’ They are smart, they are savvy, they have discovered new technologies, they have deep customer insight and they have an outsider’s perspective. Stay close to your customers. Understand their frustrations. Identify their latent needs. Keep abreast of market trends and new technologies. Constantly innovate. Test new features and new concepts. Relentlessly search for superior solutions to the customer needs that your products address today. Try to view your business from an industry outsider’s perspective. Try to put yourself in your customers’ shoes.

Following are ten sources of potential share loss for your products and brands:

1. SUBSTITUTE PRODUCTS – Products offering a similar consumer benefit but from a different product category
1. Examples:

                         i.     Vacation rental homes in lieu of hotels or motels

                        ii.     Contact lenses versus eye glasses, LASIK surgery versus contact lenses

                       iii.     Aspirin versus Acetaminophen versus Ibuprofen versus Naproxen

                       iv.     A plane versus a train versus a bus

2. BIG BOX RETAIL/CATEGORY KILLER STORES - A new retail format offers significantly more variety and selection (and often lower prices too) than your retail store does
1. Examples:

                         i.     Barnes & Noble replacing smaller, local book stores

                         ii.     Wal-Mart replacing smaller, local department or variety stores

                        iii.     Home Depot or Lowe’s replacing smaller, local hardware stores

3. NEW TECHNOLOGY - A new product or technology meets the same needs as your brand’s products do (often in a superior way), even if it is not in the same industry
1. Examples:

                          i.     Computers replacing typewriters

                         ii.     UPS and FedEx replacing US Postal Service package delivery, E-mail 

                                 replacing US Postal Service mail

                        iii.     DVDs replacing videotapes, Netflix replacing video/DVD rental stores, on-demand movies replacing videos or DVDs

                        iv.     Digital clocks replacing analog clocks

                         v.     MP3 downloads replacing CDs

                        vi.     Books on tape/CD versus printed books

                       vii.     Digital versus traditional chemistry based photography

                      viii.     Online brand asset management systems replacing brand identity guidelines/standards manuals

4. INTERNET SOLUTIONS – The Internet is often superior in offering maximum product variety, robust search and browse capabilities, 24/7 service and low prices. This can take share from brick and mortar retail store sales.
1. Examples:

                         i.     Amazon.com versus Barnes & Noble big box book stores

                         ii.     Online computer backup versus customer owned backup hard drives

                        iii.     Online versus box office ticket sales

5. MEGA-TECHNOLOGY PLATFORMS – What used to address a single customer need now delivers an ever increasing number of features and applications previously delivered by other products
1. Examples:

                          i.     Computers

                         ii.     Cable televisions

                        iii.     Mobile telephones

                        iv.     MP3 players

6. VERTICAL INTEGRATION - A supplier or customer integrates upstream or downstream into your business
1. Examples:

                          i.     Printers entering the publishing business

                         ii.     Grocery stores opening their own organic farms

                        iii.     Clothing manufacturers entering the fashion design business

7. TIMESHARING - Timesharing makes it much more cost effective for people to own a fraction of a product or to rent it when needed versus owning it outright
1. Examples:

                          i.     Condominium timeshares

                         ii.     Private aircraft fractional ownership and rentals

                        iii.     Yacht fractional ownership and charters

                        iv.     Cyber cafes

                         v.     Art rental

8. SUPERIOR CONVENIENCE – Someone else is selling the same customer benefits that you are but in a way that is much more convenient for the customer
1. Examples:

                        i.     Home delivery versus pick-up versus in-store shopping

                       ii.     24/7 access versus standard daytime and evening hours six days a week

                       iii.     Pay via the Internet or telephone versus the mail

                       iv.     Free rental car while your car is being serviced; better yet, the service shop swaps the cars at your house or place of work

9. VALUE-ADDED ENVIRONMENTS – Sometimes a new product purchase or usage environment based upon deep customer insight can provide a preferred customer experience at a price premium
1. Examples:

                        i.     Starbucks – coffee is now $3-4 a cup because you get to drink it in an  environment that provides a pampering experience

                        ii.     Build-A-Bear Workshop – pay more to build your own teddy bear from scratch. It is a fun experience.

10. SERVICE ON STEROIDS – Someone else is doing what you are doing, only with superior customer service
1. Examples:

                         i.     Grocery stores with in-store dining or freshly made ready-to-eat gourmet meals (such as Wegmans)

                         ii.     Dry cleaners that pick up and deliver

                        iii.     New home developments that include concierge services, country club memberships and on-site daycare

I wish you great success in anticipating and addressing the potential sources of brand share erosion. Stay ahead of the competition -- constantly innovate ways to gain share instead of losing it.