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Businesses Can Successfully Beat Chains and "Killer Category" Stores

Sunday, February 1, 2004

Consultants from the Society for the Advancement of Consulting, LLC (SAC) have developed techniques for businesses to successfully combat "monster" competition. Members were asked to review their client work to provide "best practices" for organizations using SAC consultants. Those practices include:

From Dan Coughlin, President, Dan Coughlin Consulting, St. Louis, MO:

"The absolute key for successful business differentiation is for an organization to define the business they are in AND what they are not in. Far too many organizations are trying to be all things to all people. For example, in the January 8, 2004, issue of the Wall Street Journal, it was reported that six leading Japanese tech companies (Sony, Matsushita Electronic, NTT DoCoMo, KDDI, Hitachi and NEC) all used the word "ubiquitous" in describing their value proposition. Essentially, they are trying to become all things to all people at all times in all situations. This desire to be completely integrated into everything is creating massive commodities in the place of once great brands. The Walt Disney Company has damaged their brand by stepping into entertainment that clearly is not 'family' entertainment. To differentiate yourself, don't try to appease everyone. Be clear about your value proposition and clearly communicate what you don't do."

From Rebecca Morgan, President, Fulcrum Consulting Works, Cleveland:

"I serve the small to mid-sized manufacturing marketplace. I see a more basic need for them to understand that differentiation is desirable and possible. Many companies I talk with believe they are in commodity markets (e.g., plastic injection molded parts, where price is all that matters); therefore they are. They miss opportunities to define how they are not commodities because it's not within their vision of the world to do so. Differentiation is within the business owner's control. After all, if Frank Perdue could create a brand chicken, all things are possible."

From Ed Poll, Founder, Lawbiz.com, Venice, California:

"Service has been and always will be the best tool of differentiation. In earlier years, competency in one's field was never assumed and one could hype quality first and service second. But, without service, the business relationship was short-lived. In today's world, competency seems to be assumed, especially if you have a 'degree' from a recognized and generally well-regarded professional society. Thus, the focus seems to be almost entirely on service. Connecting and staying connected with the customer makes a world of difference and goes a long way to shielding one from competition, all other things being equal."

From Barbara Semeniuk, President, Purcell Enterprise, Alberta, Canada:

"With regards to killer category competition: create your own niche where only you are the niche. Just like your DNA, no one can replicate the care and concern you show your clients, the information and networking skills you bring to bear on their problems, and the benefits that can accrue to them utilizing your services. The best form of marketing I have is word-of-mouth and referrals from happy customers. Also find the associations in your area that service your clients. I have Safety Associations that have 16,000 to 20,000 companies as members."

From Deb Wise, President, ByteSight, Inc., Boulder, CO:

"As products and prices become non-differentiated, then the differences lie in services, particularly those that create barriers to entry. For example, Amazon.com sells books cheap, and so can others. But Amazon has created a barrier to entry with their One-Click system of ordering, which they have patented. This is a huge convenience to their customers and a pain in the neck for their competitors. Moreover, they have been able to license their ordering system to other companies, giving them an alternate income stream. In fact, last I checked, I think their peripheral activities actually may make more than the bookselling side. This is also an example of servicing based on complimentary partnering. If it is easier to go to one place to get everything you need (where the products don't actually compete), barriers are created."

From Larry Bauman, CMC, President, Phoenix Business Consulting, Vernon Hills, IL:

"Every company should have one area that it considers a specialized niche market and own that specialized segment. In light of a 'category killer' coming into the picture, category killers generally are pursuing a competitor's core market or product. This can be done with either an aggressive cost structure or technological innovations that provide the differentiation. Companies that pursue growth at the expense of competition usually will have an Achilles' heel with specific services that provide a good point of differentiation."
 
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