Business Planning
Key Competitive Edge
This is the engine – the powerhouse – of your business… the unique factor that sets your business unmistakably apart from all your competitors. Consequently, your entire Business Plan should revolve around this crucial component. Properly used, it will be able to be applied to every single aspect of your business to make them more productive and profitable.
Yet, incredibly, almost NO small business people we speak to understand what their Key Competitive Edge really is.
When we ask them to identify their Key Competitive Edge, they invariably trot out things like products, services, retail locations, prices, exclusivity, intellectual property rights, licences, franchise agreements and other equally misleading and dangerously inadequate counterfeits.
Not one of these things is a genuine Key Competitive Edge, despite what all the Business Plan text books and “experts” would have you believe.
Is this just arrogance on our part?
Let me ask you a simple question which puts the whole question under the spotlight. Then you tell me if we’re way off the mark here.
Imagine for a moment that you’re a retailer, and you come across the most brilliant location. Not only is it right in the heart of your prime market area, it offers sensational exposure, easy access, lots of free parking, complementary businesses that will attract prospective customers and no competition. What’s more, there are no vacant stores or sites within blocks, and every other store either owns freehold or has ironclad leasehold for several years to come. Your competitors are effectively locked out of the area. And the rent is affordable.
Is this a key competitive edge?
Traditional business planning would say yes, emphatically.
But what if a multi-national conglomerate decided to go into competition with you in that spot? Despite all those ironclad leases and freeholds, they manage to acquire the property right next door to you (you didn’t count on your neighbour succumbing to the proverbial “offer they couldn’t refuse”). Or perhaps the owner dies, or retires and decides to sell. Or goes bankrupt. Or a dozen other possibilities that can never be ruled out.
What happened to your supposed “key competitive edge”?
The truth is, it was never a true competitive edge, other than temporarily. Just like all those other supposed key competitive edges that are really your Basis for Business or Basis for Business Growth!
So now you’re right back to what was always your true Key Competitive Edge…
Innovation!
In other words, your ability to outwit, outsmart, outsell and otherwise outperform your competition.
THIS will always be the driving force behind successful small businesses. Your ability to adapt to rapidly changing circumstances… to think on your feet… to hit the ground running… to WIN!
Whether that means coming up with new products and services, intellectual property, strategies, locations or ideas, it boils down to your ability to innovate.
Ironic, isn’t it?
The thing that makes every business different from every other business is ultimately the same thing in every one of those businesses!
Never lose sight of this vital insight. Confusing Key Competitive Edge with your Basis for Business and Basis for Business Growth is potentially fatal. It can lull you into a false sense of security that, one day, will be rudely shattered by reality. Count on it, if only because of the Bandwagon Factor*.
They’re closely related — but in a cause-and-effect relationship.
|
Key Competitive Edge |
Basis for Business/Basis for Growth |
|
Innovation |
Intellectual Property (patents, copyrights, design registrations, etc), products, services, licences, franchise agreements, strategies, unique retail locations, etc. |
|
Cause |
Effect |
*The Bandwagon Factor? That’s where others emulate or imitate your achievement, for better or worse. Those who successfully emulate you will make life hard for you. Those who merely imitate you will succed in muddying the water, confusing and distracting your market place. Either way, you lose.
(By the way, the difference between emulation and imitation is simple… emulation is where they copy the causes of your success; imitation is where they merely copy the effects of that success.)
Return to Your Business Vehicle
Business
Mission/Business Vision
• Key Competitive Edge
Basis
for Business/Basis for Growth
• Customer Relationships
Finance •Internal
Relationships • External Relationships
