Strategic Success v Tactical Superiority
By: Greg Roworth
While almost every business strives for tactical superiority in their markets, the real winners are those that focus on strategic success. These winners have found a way to break out of the mold and break free of the playing field their competitors played on. They manage to create a unique strategy and operate so differently that they begin to play a new game with new rules where they have the playing field to themselves.
One of the elements of a business plan is to assess the market environment, which involves a SWOT analysis and a competitive analysis. This comprehensive analysis gives you the opportunity to discover particular trends in your industry as well as identify needs that your market may have. Often you will discover particular needs that are not being met by any of the businesses in your industry or geographic market area. This provides a unique strategic success opportunity for you.
Discovering how to compete on a different level than the rest of the industry is a key to the strategic success of your business. You need to work out how to change your product that is otherwise basically a commodity where price is the major competitive tool and create a new product package that becomes a unique strategic offering compared to the limited package others are offering.
This new way of packaging the product has the potential to change the nature of the industry and market you operate in, as well as create a unique competitive advantage that becomes the platform for you to achieve strategic success while others around you are floundering in an otherwise static or depressed market.
Most businesses do not operate strategically. Their business plan tries to discover superiority at a tactical level and usually the main competitive tactic they use is low price. Unfortunately for these operators, unless they are able to develop a strategic cost advantage by discovering ways to produce or perform less expensively than your competitors, low price is not a sustainable competitive weapon. Unless you can gain a sustainable advantage and capture the market, you just keep reducing your profit margins by selling cheaper. In the end, there is no margin left.
The only way to set yourself apart from your competitors is not by lowering your prices, but by finding a way to be uniquely different. But strategic success need not come from an innovative technological advantage as many may think. You need not create a unique product, although that will help. Most of the strategic successes have been created by finding a unique strategy in marketing their otherwise commodity products, like Dominoís Pizza and Starbucks, for example. What we have discovered from our examination of these icons and others like them, is that the critical aspect of their strategic success is that they donít just focus on performing their business operations well on a day to day basis, but more importantly, they operate intelligently at a strategic level. Average businesses rarely do this. Most business plans focus on competition at a tactical level, trying to outdo their competitors by performing marginally better on a number of critical factors. It is true that you may gain some competitive advantage if you can be faster on delivery, more knowledgeable on service, slightly cheaper on price, etc. But these advantages are likely to be unsustainable. With these factors you are competing against what everyone else is trying to do as well, or better than you. While this is good healthy competition, beneficial for customers, and obviously beneficial to your business if you can win more times than you lose, it only achieves marginal results in terms of increased sales, profits and growth, while strategic success leads to market dominance, rapid growth and sustainable profits.
Greg Roworth owner of http://www.autopilotbusinessplan.com is an author, mentor and specialist in small business strategies including Strategic Success. He helps business owners transform their average businesses into efficient systems so the owner can live a life of freedom, fulfillment and reward.
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