In any business, you want to keep your competitive edge. Most companies use the concept of operational effectiveness, the idea of performing tasks better than their competition. However, Michael Porter, management expert at the Harvard Business School, makes the case for strategic differentiation, doing the same thing as your rival but in a different way they cannot easily duplicate.
The downside of operational effectiveness.
A store such as Walmart has cornered the market on operational effectiveness: They offer similar products and a similar experience to its buyers as a Target or a K-Mart, but in many ways they outdo the competition. However, that “sameness” means that eventually, the competition will eventually figure out your strategy, work out the bugs and kinks that hold it back, copy it, and surpass it, which is called the “fast-follower” problem. Google managed this by studying Yahoo! and others, and then creating a better product.
Strategic differentiation works better for competition.
If you want to separate yourself from the pack, you need to differentiate yourself from them, not simply use the same methods and do it a little better. Instead, you have to take those activities and give them a tweak that a competitor cannot easily duplicate. Take technology: If a company uses it in such a way to create an approach that is different enough to defend itself against replication, you’ve created a competitive edge for yourself. In other words, it can’t be easily reproduced with generic equivalents. You can then leverage that technology to foster strategic positioning.
Consider the benefits.
You want your product to stand out. Strategic differentiation allows you to create a value for it that customers recognize and move toward. You can also differentiate in ways other than price, such as quality or some other stand-out feature. This, in turn, promotes brand loyalty. For example, Bounty(r) towels may cost more than others but have proved themselves more absorbent. And best of all, strategic differentiation means there’s no substitute.
If you want to do the best for your company, utilize strategic differentiation. If you want that in terms of your employees, find your next hire with PrideStaff.