If you want your business to stand out from the crowd, then you have to come up with a unique idea or product that can give you a competitive advantage over your business rivals. Without a distinct position in the market, your business will get lost in a saturated marketplace and no one will notice it, even if you are doing a great work. Do not afraid to innovate and think out of the box because it is the only way that will distinguish you from other brands. Once you get ahead of the pack, it is all about maintaining your advantage by continuously introducing customer-focused products and services. One small mistake and one right decision can make a huge difference.
This one and the three that follow—all having to do with understanding and maintaining competitive advantage—come from the playbook of Michael Porter, professor at Harvard Business School and famed corporate strategist.
Having an advantage means delivering more value than your competitors do, in the form of lower prices (Wal-Mart), better design (Apple), instant gratification (Google), or some other tangible benefit. If someone tells you his company has no competition, that person is 1) naïve, 2) stupid, or 3) insane.(That’s why, as part of last year’s search for “America’s Most Promising Companies,” Forbes asked contenders to provide descriptions of up to three major competitors; companies that didn’t answer were discounted or discarded.
Back to the warning in question No. 2: While your product may sell, what you think makes it special may have little to do with what customers actually crave. Misdiagnosing that mismatch can lead to all sorts of bad strategic decisions. Clayton Christensen, another Harvard guy, demonstrates this point beautifully. In this video clip below, Christensen explains how he helped a fast-food chain sell more milkshakes by figuring out why people were buying them in the first place. It turned out that the answer had nothing to do with how thick and delicious the shakes were; it had to do with the “job” the shakes were being “hired” for.
The core purpose of a business is to make a profit. For that purpose, you need to identify a revenue stream that generates revenue for your business all year round. A continuous revenue stream can do wonders for your ailing business as it did in the case of T-Mobile. By identifying revenue stream that reaps rewards in all situations did wonder for T-Mobile. They were on the verge of business catastrophe but John Legere helped them to avert the disaster by removing all the contracts and listened to what customers want.
Next, he gave his customers choice to renew their contracts or leave, which did the trick for T-Mobile. This can also work for you as well. It is better that you find multiple revenue streams so that if one fails to deliver, the other one is always there to support your business.
The biggest challenge for businesses is to cut down on operating expenses and keep them in check. Make sure you are fully aware of where your money is being spent and what ROI (return on investment) you are getting. Not keeping track of your financial matters leads to the downfall of many businesses as they eventually run out of financial resources.