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If your exit strategy is to grow your business until it is able to be bought by a larger company, you cannot play it safe. A secure, conservative business with predictable income and slow growth is not attractive to most large organizations. They want to acquire companies that are different and separate. You can position your business in that light by establishing a clear competitive advantage.
It’s impossible for someone outside your organization to tell you exactly how to establish a competitive advantage (after all, if everyone could see the opportunity, your other competitors would have already done so). Instead, I’ll give you some concrete examples of the different categorical ways you can create an advantage. Use them to start thinking creatively about apps for your business:
1. Niche down
The first and most obvious option is to go down to a certain part of the market. By zooming in, you can make your business a major resource for XYZ, not just another option among countless products and services.
Let’s say, for example, that your company manufactures and sells water bottles. If you try to go to the market and sell water bottles to everyone and everyone, you will hardly stand out. Read also : Abbott, the Governor’s Commission for Women announces the Women-Owned Business Series. However, if you market your water bottles as water bottles for construction workers who want something extremely durable that keeps water cool at high temperatures, you have a much better chance of creating a competitive advantage.
Related: How lowering your sights gives you the power to dominate your market
2. Develop a USP
Your business needs USP, which stands for Unique Sales Offer. Read also : Google says it’s time to pay for longtime small business users. This is a one-sentence phrase that explains exactly what makes your business unique and compelling.
There are dozens of different ways to come up with USP, but here’s a good formula: “We help [NICHA] achieve [WISH] without [PAIN].” Using the water bottle example above, a good USP would be, “We design water bottles for construction workers that keep water ice cold even at 90-100 degrees so you never run out of energy.”
As you can see, there is plenty of room for flexibility. It is crucial to highlight a particular niche, mention the desire that your product / service helps them achieve, and highlight the sore point that your product / service helps them avoid.
3. Establish a unique mechanism
One thing that can really help is identify a unique mechanism that makes your technology or process look unique and protected. See the article : The diversity business case is being pushed back.
This is something Schlitz Brewing did back in the 1920s. Legendary advertiser Claude Hopkins toured the plant once he saw the extensive process by which they refined their beer. He was amazed – so much so that he asked the owners why they never shared this process in their marketing. Their response: “Every brewer in the industry does it the same way.” But Hopkins ’point was that no one had ever told this story before, which meant customers in the market had no idea how extensive the beer refining process was. After launching a new marketing campaign focusing on all the steps of purification, Schlitz jumped from the fifth-ranked beer in the U.S. to the top-ranked beer company in just 60 days.
What is your unique mechanism? What process, technology or unique approach do you use? Even if everyone else is doing something similar, you can establish a competitive advantage by taking ownership of it.
Related: 3 ways to recognize your company’s unique marketing angle
4. Enhance customer service
Let’s say you have the same product that serves the same market as everyone else. In this case, your best option may be to differentiate and establish a competitive advantage with superior customer service. If you can delight people with your customer service, you will create a loyal tribe of customers who will consistently choose you over the competition (even in situations where your prices are higher or your product options are more limited).
5. Make your business an attractive acquisition target
Competitive advantage does not in itself guarantee an offer to acquire. However, it prepares you well for these talks and gives you much more power in negotiations and due attention. If you have something that no other company in the industry has (or something that I can’t easily replicate), it adds some intrinsic value to your organization.
With that in mind, it would be wise to spend the next few months focusing on how you can create a competitive advantage or strengthen one you already have. This is your ticket to success.
Related: How to position your company for strategic acquisition
What are Porter 5 generic strategies?
What are Porter’s generic strategies?
- Cost management strategy.
- Differentiation strategy.
- Cost focusing strategy.
- Focus on differentiation strategy.
What are the 3 basic competitive strategies?
According to Porter’s model of generic strategies, there are three basic strategic options available to organizations to gain a competitive advantage. These are: cost leadership, differentiation and focus.
What are the 3 main business strategies? Practically speaking, there are only three basic business strategies: cost strategy, strategy of differentiated products or services and focus on niche strategy. Understanding these strategies is key to writing a good strategic business plan.
What are the 3 generic strategies?
Definition: Back in 1980, Michael Porter developed three generic strategies that a company could use to gain a competitive advantage. These three are: cost leadership, differentiation, and focus.
What are the 3 competitive advantages?
There are three different types of competitive advantage that companies can actually take advantage of. These are costs, product / service differentiation and niche strategies.
What are the types of competition?
Economists have identified four types of competition – perfect competition, monopolistic competition, oligopoly and monopoly.
What is competition and its types? There are three primary types of competition: direct, indirect, and substitute competitors. Direct competitors are the most recognizable type of competitor, while it is the most difficult to identify substitute competitors.
What are the 4 types of competition in economics?
Economic market structures can be grouped into four categories: perfect competition, monopolistic competition, oligopoly, and monopoly.
What are the five kinds of competition?
Advice. The five main types of market system are perfect competition, monopoly, oligopoly, monopolistic competition, and monopsony.
