How to outcompete the competition
In mature often saturated markets developing a
unique strategic position which gives you sustainable competitive advantage in
your market is the holy grail for business owners. To be somewhere that your
competitors aren't, and to have something that cannot be taken away is what
everyone setting up in business dreams of achieving. It is one clear defining
way of out competing the competition is to develop a sustainable competitive
advantage in a market
Sustainable Competitive Advantage
Few companies can lay claim to that holy grail
position for any length of time, here are some that come immediately to mind: Ferrari, Rolls Royce Engines,
Hoover, Apple's Iphone and Ipod, Boeing, Walkman, Sky, Microsoft Windows, are
all good examples of companies who have achieved, or are holding it
today.
Dyson: Model of Creating Market Leadership
To be recognised as the market maker such as Hoover
gave it unbelievable control of the market for most of the 20th century, not
only owning the market it was even named after them. What changed? A loss of
focus and desire to continue to own the market coupled with the airplane ticket
fiasco which opened the door to new competitors and to one man in particular James Dyson who grabbed the opportunity to replace
Hoovers once held position in the market launching his own Dyson brand
through technology shift of his cyclone bag less vacuum.
His passion, created from vacuuming at home and
becoming frustrated, seeing the cyclone idea at a sawmill which then took 15
years, 5,127 prototypes to turn into a winning product, which today benefits
upon 60% recommendation purchases and has allowed Dyson to spin his cyclone
technology into air dryers and washing machines.
Features of Strategic Competitive Advantage
What are the key features of sustainable
competitive advantage for any company in their market, well here are the most
commonly found top five:-
- Charge a premium for its services; even low cost suppliers out price other low cost suppliers.
- Lead the market by innovation; will get to market new ideas quicker or in a more dominant market shift way.
- Controls the key channels to market; from buying decision processes to pricing structures.
- Owns the pace of change within the market; from technology development and consumer shift
- Control of buyer activity; the significant majority of the share of buy (SOB) and share of space (SOS) through its dominance.
To achieve sustainable competitive advantage is extremely difficult, most companies manage to reach a challenger market position. For that to happen their has to be a clear vision of where the company is going and where the market opportunity exists. For men like James Dyson the advantage was that he was in the right place at the right time, with the right product that enabled a technological shift in the market with his bag less vacuum.
