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Competitive Strategy

It’s about more than reducing price, and it’s not only for big corporates.

Ed Hatton




Large IT companies spend millions on market research to see how they stack up against their competitors, and use this information to figure out how to differ from them and be better.

Automotive manufacturers and importers watch every move competitors make; being first-to-market with a new fashion trend can mean the difference between a clothing brand outselling its competitors or disappearing.

Even cities position themselves against other cities to attract tourists and businesses. Why should competitive strategy (a vital part of marketing strategy) only be relevant to very large organisations? Why not your business?

Being competitive is a core requirement for all businesses irrespective of size. Not-for-profit organisations like charities, schools and religious organisations compete for funds, members and media attention.

Very small businesses and start-ups must wrench business away from competitors or alternatives just to survive. Without a compelling message about the advantages they offer over others, many of these organisations will fail as consumers take the easy route of buying the most popular, the most accessible, or the most familiar.

Related: 10 Epic Businesses Give You Top Advice on Innovation and Strategy

Competitive advantage

More than 30 years ago, Michael Porter defined competitive strategy as: “The plan for how a firm will compete, formulated after evaluating how its strengths and weaknesses compare to those of its competitors.”

This plan should be focused on getting a sustainable advantage over competitors so it’s much more than simply reducing price or having a special offer.

Implementing competitive strategy means taking actions to improve the firm’s market position by gaining a competitive advantage over the organisation’s rivals. The competitive advantage can either be delivering better customer value, or operating more efficiently than competitors, or both.

A lot of start-ups are born because the entrepreneur has an idea for an innovative new product or service that isn’t available from competitors. This doesn’t mean there’s no competition or need for competitive strategy. Customers who buy the new product or service take money from other expenditure, and if the idea is successful it will attract many imitators.

Higher efficiency lowers cost

Better value for customers can mean more offering for less money, higher functionality, a more convenient way of buying, faster delivery, better warranties or a host of other possibilities like making the buying experience more attractive or fun.

The Hooters chain of restaurants uses attractive and outgoing waitresses in hot pants; tyre fitment centres offer filter coffee and sport on a big screen; FNB boasts credit card delivery to your door.

More efficient operations can mean having lower costs of operations, higher quality for the same cost, less administrative overhead from making fewer mistakes, and faster turnaround time.

This last one is equally important for pizza delivery and those who make tooling for car manufacturers, which indicates just how across-the-board the requirement to be competitive is.

Putting together a competitive strategy in four steps

  1. Identify who your competitors are
  2. Find out about the strengths and weaknesses of your competitors’ companies and products
  3. Plan how to compete against them and then implement that
  4. Monitor their reaction to your actions.

This may sound complicated, difficult to do, and hugely time consuming. You may think you only need to improve your offering, but that’s not good enough; you should be doing that continuously anyway.

Competitive strategy can be intense and time consuming but can easily give you opportunities to grow in size and profit far beyond your current forecasts.

Microsoft, Facebook, Nandos and Discovery all started as small operations and grew to dominance in their sectors because they had great competitive strategies. Will your business be a giant of the future?

Who are your competitors?


Many business plans I see list companies selling roughly the same product with or without their strengths and weaknesses, but make no attempt to show how you will compete with them.

This is meaningless. To identify your competitors I suggest you acquaint yourself with Porter’s Five Forces: The bargaining power of buyers and suppliers, the threats of substitutes and new entrants as well as traditional competitors. Then list the four or five most worrying competitors; those that could hurt your business if they chose to.

Many entrepreneurs claim their business is so unique that there really are no competitors. If this is you, ask yourself: “Why am I not yet a billionaire?” It’s likely that your competitive threat comes from customers using their available funds to buy something totally different but equally satisfying or better known to them. There are always competitors or imitators.

Once you have a prioritised list from any of the Five Forces, go and research the companies. There is an amazing amount of information on the Internet, in their publications and in news articles.

Talk to experts in your industry, have someone call them to see how they are treated, get profiles of the management team, identify their suppliers and major customers. Form an opinion about their size and financial and marketing strengths, identify their sales channels.

Investigate how they handled competitive situations in the past. Some companies are relentless litigators, others bully new entrants with price wars or threaten customers and suppliers to stop them from trading with you.

Now list their major strengths compared to your business, their style of operating and competing and look for areas of weakness. However powerful they are they will have weaknesses, search for them, think creatively. Their own size and power may be working against them, slowing responses, being arrogant or management being unaware of how staff treat customers.

Related: Win-Win: Strategically Partner With Your Top Competitors


Working out how you can compete with the identified companies may seem like a daunting task, especially if they are larger and ruthless. On the other hand not working out how you can compete is likely to lead to extremely unpleasant tasks like winding up your business, so take the plunge.

You have two broad opportunities to compete – you can have lower costs or you can be distinctively different in the eyes of the market.

Focus on how you can compete in areas where the competitors are weak. If they are large bullies get the community on your side, if they are bureaucratic be responsive, if they have quality failures make sure you have none, if they are arrogant be especially receptive to customers and their issues.

To be distinctively different means much more than just doing things differently. The difference must be desirable for customers. They must get more value when buying from you; lower prices or higher performance.

Higher performance is not only of the product or service, it may mean higher quality, faster or easier availability or better financial terms. You need to think creatively; look at successful marketers. Motor dealers have service plans, cell phone companies bundle free and paid calls into packages, countries offer tax free ‘holidays’ to encourage industrialists to set up new factories.

Barack Obama used social media to effectively deliver his ‘yes we can’ message to the electorate. Nandos and Kulula made it fun to deal with them. Small businesses can borrow and use these and many other ideas.

While you are planning, you may find that competitive strategies which look as if they would work against one competitor may not be the same for other competitors. Devise the best compromise of actions, focusing on the most threatening competitors.


If your competitive strategies are implemented it is likely you will take business from your competitors. They will not sit back and let you eat their lunch, they are going to react, possibly intensely or viciously. Be prepared.

Keep monitoring their style, strengths and weaknesses at regular intervals. Do the same to your own organisation; you do not want to fall into the same traps they did. This takes time, money and effort, but it is one of the easiest ways to grow your business significantly, and become stronger than competitors.

You will need to adjust your strategies as this happens, but you may now be able to afford formal competitive market research. Have fixed times set aside for competitive strategy focus and monitoring how your strategies are working. It’s well worth the effort.

If you have read to this point you presumably are thinking seriously about competitive strategy. A percentage of you will be thinking that this is something you and your team really should do, but with the workloads of managers of entrepreneurial small and medium businesses, doing it may be a challenge.

You may be thinking, “How do we find time to do all this work? How do we find the money?” It really is a question of priorities. Would it be worth your while to not respond to a tender, to postpone the product development, to again delay the company profile that should have been done months ago?

Only you can answer these questions, but while doing so remember that good competitive strategy may mean you are creating a much better and bigger business over time, but gaining significant short-term advantages. Competitive strategy gets my vote as the priority.

Related: What Exactly is Strategic Planning?

Ed Hatton is the owner of The Marketing Director and has consulted to and mentored SMBs in strategy, marketing and sales for almost 20 years. He co-authored an entrepreneurship textbook and is passionate about helping entrepreneurs to succeed.



6 Questions You Should Be Asking When Coaching

Top athletes have coaches because they’re winners. Business leaders should be the same.

Nadine Todd



Dr Marshall Goldsmith

Whether you’re a CEO looking for a mentor, coaching your management team, or structuring a coaching programme for your managers to implement, there are six questions that can help anyone get better at anything.

The expert

Dr Marshall Goldsmith is a best-selling author and world-renowned business educator and coach. He has coached top CEOs, including Alan Mulally, former President and CEO of Ford Motor Company.

The key to a successful coaching programme is simple dialogue and establishing responsibility. The person being coached must understand and agree that success lies in their hands. They must take responsibility for their actions.

Related: How Business Coaching Can Help You Achieve Your Goals

The method

Once every few months, have a direct coaching session. Ask (or answer for yourself) these six questions:

  1. Where are we going?
  2. Where are you going?
  3. What are you doing well?
  4. Do you have suggestions for my improvement?
  5. How can I help you?
  6. So you have suggestions for me?

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4 Ways To Develop The Leaders You’ll Need In The Future

One of the most challenging aspects of leadership development is consistently and effectively identifying the next wave of leaders.




One of the most challenging aspects of leadership development is consistently and effectively identifying the next wave of leaders.

It can be easy for those at the top to forget that eventually someone will have to take their place at the helm. And ignoring that fact has lead to issues with succession planning, unwanted turnover and other challenges in leadership development in many organisations.

2016 High Impact Leadership research from Bersin by Deloitte asked 2,422 HR and business leaders from around the world how well they believed they could discover new leadership talent. Just 35 percent of respondents said they were above average when it came to successfully identifying and developing leaders.

To understand why this is, consider the typical leadership development paradox. Traditionally, the first step is to choose who has leadership potential, then develop their skillset. Logically, however, this makes little sense.

How is it possible to identify effective leaders if employees have yet to receive any type of leadership development?

Here are four ways to properly identify better qualified candidates for leadership positions:

1Stop choosing potential leaders based on unrelated skills

Gallup’s 2015 State of the American Manager Report, which studied 2.5 million manager-led teams in 195 countries, found that the top two reasons employees are promoted to management positions are because they were successful in a non-managerial role or because of their tenure with the company. Neither of those criteria have any proven correlation with leadership skills or relevant experience.

Create a better means of measuring for true leadership potential. Look at the culture of the organisation and envision what it would look like for someone to lead by those values.

Also consider how successful leaders evolved over time in the organisation. Then use that information to make a list of recognisable traits to look for as signs of leadership potential.

2Broaden leadership development to more employees

People learn and grow at their own unique pace. Requiring that an employee reach a certain position or be with the company for a certain number of years before they’re offered leadership opportunities holds back those who might be ready for more responsibility now. Or even worse, it might push those who aren’t yet ready into leadership roles.

Instead, let leadership development be a company-wide initiative. This gives more people the chance to take the next step in their career. It also creates a larger pool of possible great leaders to draw from across the organisation.

3Track progress and growth

Track progress and growth

There’s no way of knowing who is ready to step up and lead unless development is monitored. Remember that this is a process. Employees need feedback from their mentors and coaches to know for certain what skills they’ve mastered as well as where there can still be improvements made.

Develop a way to assess progress for different leadership positions, and be clear with employees and coaches about what success would look like in different situations. For instance, explain what is expected of a first time project leader.

Get everyone on the same page about the developing leader’s responsibilities and how that should guide their team.

Then collect thorough feedback from all those involved. Ask the leadership candidate what challenges they faced as well as where they think they thrived. Pose the same questions to those they supervised and organisational mentors.

Over time, this will reveal patterns that make it easier to identify who is best suited for leadership in the long-term.

4Focus on continual leadership development

There is no such thing as too much experience. There is always more that can be learned. After leadership candidates have been identified, continue to nurture them. This keeps employees from feeling that they have plateaued, which is unfortunately common.

The 2014 Insigniam Middle Management Survey: Middle Management’s Critical Role In Saving Company Innovation looked at responses from 200 middle managers from around the world. It found that only 15 percent of managers believe they will ever be promoted to the next level of leadership at their company.

Whether intentionally or not, employees who have proven their leadership abilities are being told that their leadership journey is over – and this hurts both them and the organisation. Encourage a steady stream of highly trained and skilled leaders working their way up by demonstrating that there is no end to development.

In order to clearly see who the next wave of leaders is going to be, employees need to be given the chance to hone and exercise their skills.

That means redefining how leadership potential is identified and providing each employee with the chance to develop personally and professionally.

This article was originally posted here on

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Have You (Really) Put Your Business To The Test?

You should constantly test things in your business to see if they’re working. In that direction lies success.

Nicholas Haralambous




There’s a pretty famous saying that people in business like to use: Always be closing, or ABC. It’s a very sales-driven concept that suggests that whatever you do, you should always be closing a sale.

I used to like that way of thinking: Drive your pipeline growth, work on the numbers and push the sales as hard as you can all the time.

That approach definitely works for certain types of businesses, but after a while it can be soul destroying work that leaves a business a bit hollow. So over the past few years I’ve been working on a tweaked methodology.

I call this method of building and selling: Always be testing or ABT.

Related: 3 Sure Fire Ways To Improve Efficiency And Find Your Business’s Productivity Sweet Spot

The concept is simple. You should constantly be testing things in your business to see if they’re working. If they are working, great, you can then start testing how to improve them. If they’re not working, you find out and can start testing fixes for the problem.

This applies to your team, your product, your day-to-day strategy for selling, customer acquisition and anything else you can think of.

Start testing yourself

The obsession with testing things started in my personal life. I was doing it without realising what I was doing. I started waking up 15 minutes earlier every month and after a while I was spritely and awake by 5:30am and walking my dogs or working while everyone else was asleep.

Then I stopped eating sugar for a while to see if I’d feel better. I did. That didn’t last but I then stopped drinking coffee to see if I’d sleep better. I did. So now I don’t drink caffeine of any kind after 3pm.

I found that I was constantly testing out everything that I did and tweaking my life accordingly. So one day I realised that this model would probably work in my business: Small, frequent tests with specific goals in mind to try to learn something new or verify something old.

Related: How You Can Make Those Sales When Nobody’s Buying (Yes It’s Do-able)


Testing requires reporting

Setting up tests is not difficult. But tracking the results of the test requires preparation. Interestingly, when I moved Nic Harry from a pure e-commerce company into physical retail, I discovered how slow real world retailers have been to use technology to track changes they make in store.

With we have been able to test, tweak and track results for years. I have many tests and lots of data to pour through when I want information about a decision. I can make a change on the homepage and see if it leads to more transactions than the previous homepage tweak. If it works, great, if it doesn’t, I go back to the way it was.

I decided to take this type of thinking into our flagship store by treating each wall and window as a web page. We kept notes of which socks were on which walls and which socks sold better where in the store.

After a few months we had figured out which walls were the hotspots in the store. Then we started to move the socks around and see if we could influence who purchased what just by placing the socks in a different place.

This type of tiny testing environment helps me understand my stores, my team and me products with granular detail. However it wouldn’t be possible if my systems weren’t set up properly to help me track these changes.

Why test something that works?

People often ask me why they should test something that is clearly working. Well, what if one day your product stops selling and you don’t know why? What if your core revenue stream dries up over the course of a few months or years and you haven’t noticed?

Testing helps me to stay in front of my problems. I can think of a stand out example of a company that stopped testing and ended up losing: Blackberry. Do you remember them? I do, but not many people will in a year or two.

Related: 10 Brilliant Responses To The Customer Who Is ‘Just Looking’

It’s also worth remembering Kodak. Kodak was founded in 1888 and thrived for a century, literally. Then it stopped testing in the face of innovation all around the company and from within. In 2012 Kodak filed for bankruptcy protection. The ironic part of the Kodak story is that digital photography killed their business. Why is this ironic? Kodak developed the first digital camera in 1975 but didn’t test it in the market. They were worried it would eat into their existing business.

If only they had tested the product before they dropped it. Tests do not have to be large and complex. Implement systems that allow you to track the changes in your business whether online or offline. Then engage with your team about how they can help you to measure and manage the tests and then start with something small.

Testing for no reason is futile. It’s imperative to know what you’re testing and why. Once you’ve figured out your goals, start testing and never stop.

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