Five Targets of Competitive Attack On Your Business

When your business finds success, it will be attacked. The reality is, success invites competition.  In classical strategy there are five targets commonly attacked. This article explains the five targets and provides suggestions on how to defend them.

If you are an entrepreneur, small business owner, or CEO of a Fortune 500 company, you know that success breeds competition. No matter the venture, once it demonstrates a solid customer base and profit, it will come under attack from existing and new businesses. While your keen business sense may create a profitable business, your ability to think strategically will ensure your survival.

YOUR FIRST LINE OF DEFENSE

Your first line of defense is to pursue opportunities that are easy to defend. Simply put, don’t start a new venture that is easy to imitate. The more barriers to entry that naturally exist or that you can create, the easier it will be to defend yourself later. The second line of defense is to respond to the competitive situation appropriately.  This is a matter of risk management and the proper handling of uncertainty. The final line of defense is protecting your business from direct competitive attacks.

THE FIVE TARGETS OF ATTACK

When a competitor chooses to attack a successful enterprise there are five viable targets. Your job is to defend these five areas by making them impossible or too costly to attack.

The five targets of attack include: (1) People, (2) Suppliers, (3) Ideas, (4) Location, and (5) Suppliers.

The first thing you will want to do after a successful venture is to secure your business against imitation. Find ways to offer your product or service that cannot be easily copied. Since imitation requires work and competitors are not usually very innovative, imitation usually takes the form of stealing.

ATTACKS AGAINST YOUR PEOPLE

First, competitors will try to hire your people. They will assume your rise to profits is directly related to your team and seek to steal them away. This can be a serious problem if your venture relies on specific talent. If you build a catchy website that is popular only because of its innovative technology and a well-financed competitor hires your genius, you’re in big trouble. This form of attack can be hard to defend against when competitors have deeper pockets than you do.

DEFENSE: Your people must be attracted to your business by more than a paycheck. Be sure to offer great rewards to such people in a form that is reinforcing for them. Everybody is motivated by different things so don’t attempt to keep your best people with rewards that are satisfying to you – ask them. People will stay unless you give them a reason to leave. In the event they do leave be sure to keep the door open for their return. It’s hard to have a team member “defect.” Even so, no matter the terms of their departure, make it clear you value them and look forward to their return. When they are past the honeymoon period with your competitor and the money isn’t buying happiness, you want them to return, if for no other reason than to deny their skills to your competition. Once they return, provide them opportunities to share why they came back. This will discourage others from making the same decision.

Keep your talent busy and their jobs interesting. Many employees leave simply because they are being underutilized and don’t feel appreciated. Give them challenging work and make sure they never get bored.

When you identify new competitors make your people feel threatened personally. Make your decisions and priorities very clear. Nobody should second-guess his or her actions. Treat your people like family without becoming their best friend. They should respect your leadership and believe in you without having to explain your reasoning.

ATTACKS AGAINST SUPPLIERS

Whatever your business, it survives due to its suppliers. This is a bigger threat for those offering third-party products (retail) or manufacturing than simple services. This is a more serious threat when your suppliers industry is in a slow down and they lower their prices to stay in business. Lower prices invite more competition as availability increases. This lowers the cost of entry for competitors.

DEFENSE: When feasible and it makes sense, setup exclusive contracts with suppliers. Also, develop excellent relationships with suppliers and get to know them on a first-name basis. It’s much harder (though not impossible) to turn on a friend.

Another defense is to find ways where your business makes their business easier to own and operate. Toyota is known for sending engineers and other experts to their suppliers to help them become more profitable. If you own a restaurant and can offer expertise in shipping and packaging to local farms, you can create a dependency that protects the relationship. If your suppliers lower their prices, it will also invite more competitors. In such cases, it may be smart to lower your prices to increase the payback period for new entrants.

ATTACKS AGAINST IDEAS

The third threat to defend against is stealing your product and service ideas. Take Starbucks as an example. When Starbucks introduced the bistro style coffee shop, they were effectively the only game in town. They were smart to flood the market with their shops and cut off competitors. Another example is iPod vs. the Zune. Every successful business brings copies.

DEFENSE: Copying products takes time as they have to duplicate all you’ve done. Therefore, your first line of defense is to stay ahead of them. If it takes about six months to copy and ship your product (or service) you have to change it within that time frame. This will make anything they sell behind the innovation curve and lowers interest in their offer.

Pay attention to the business climate. When your product is so popular that you cannot keep up with demand it invites more competition. To avoid this, don’t invest in marketing campaigns that stimulate market demand that you cannot satisfy completely.

ATTACKS AGAINST LOCATIONS

The next form of attack is when competitors try to undermine your location. This one is well understood and everyone knows the three most important aspects of business; location, location, location.

DEFENSE: You will want to tie up the ideal locations for your business as quickly as possible to deny your competition. If you’re in a strip mall, be certain to get a lease that prevents competitors from moving in next door. Location can also be related to how you deliver your products and services. If physical property is too costly, find a way to bring your product to the customer much like Amazon has stolen the market from many bookstores without ever opening a physical location.

ATTACKS AGAINST CUSTOMERS

The final attack we will discuss is trying to steal your customers. This one is relatively straightforward and is often the first one a business owner, not thinking competitively, will notice. They will offer deals, lower prices, and other incentives to encourage your customers to defect.

DEFENSE: Know your customers. What entices them to buy? Is it price, quality, or some other factor? Stay focused on their needs rather than your product or service. It’s easy to become internally focused on your business and begin to develop your processes to make your life easier and your business cheaper to operate. This often leads to methods that ignore customer satisfaction and creates an opening for competitors.

You have to defend all five of these targets. The only way a competitive attack will succeed is if you leave an opening. If you fill the needs that your competitors attempt to attack, you can block them and win. These concepts are a small part of The Science of Strategy Institute’s “Nine Formulas for Competitive Business Success” a complete training program in classical strategy.

A leader or strategist that can’t get work is incompetent.

If you are a strategist, planner, and leader and are experiencing job layoffs or slow business it’s only because you’re incompetent.

How’s that for a slap in the face? I have been reading blogs, emails, forums, and websites about project managers, strategy experts, and leadership experts that are having difficulties in the current economic climate. At first, my response was to write some responses about how to approach the market. However, after writing up such responses I noticed they were all related to using strategy, leadership, and planning to deal with the problems. It then occurred to me, if you were really a leader, a strategist, and/or a project manager, and using what you are supposed to be an expert at doing, you wouldn’t be in such a bad position.

If you can’t get all the work you can handle. If you can’t convince clients to work with you. If you can’t succeed, you simply don’t know what you’re doing. This may hurt your ego but we all have to face reality. You may be a brilliant engineer, programmer, or contractor when it comes to your specialty. However, the fact that your skills got you the title of leader, strategist, or project manager, doesn’t mean you know what your doing in these areas. Let’s face it, you may be a great programmer turned project manager but you still suck as a project manager. To get a job, go back to programming and leave project manager off your resume.

I am not making this post to attack those you in this position. I am actually trying to help. Picture it this way. If you met a financial planner that was on hard times, little money, and lost their retirement in the stock market, would you hire them? No! They are incompetent. You wouldn’t hire an accountant that’s having tax problems (unless you’re Obama). You wouldn’t hire a mechanic that’s late for an interview because he couldn’t get his car started. And you wouldn’t hire a strategist that can’t find his or her own way.

If you claim to be one of the experts and are experience a tough market, go back to the basics. Honestly appraise your skills and determine if you’re really a leader, strategist or planner or you’re more of an expert in some skill that’s doing strategy and planning. If your expertise is really in construction and not project management then go back to construction. You’ll quickly find a job and you won’t spend so much effort trying to fool yourself and others.

Five Ways to Win in Business

In classical strategy, we say that your goal is to constantly advance your position. It is unnecessary and usually impossible to make large gains all at once. The key is to make small, unstoppable improvements every day. We don’t have to “beat” our competitors, we simply have to position ourselves to win.

This begs the question of what we mean by “advancing your position.” Sun Tzu identified five factors that make up your position. Improving on them advances your position. These five include mission, ground, heaven, command, and methods. Here is a brief definition of each and how you can improve upon them to advance your position.

1. MISSION: Get more and more people to accept your philosophy, mission, or see you as having the higher moral standard than your competitors.
2. COMMAND: Convince more and more people that your leadership is better. This can happen in five ways:
a. You are more trustworthy.
b. You are smarter in terms of learning what your customers want and need.
c. You care more about achieving your mission rather than just money.
d. You have the courage to face the bad times (take action) without freezing or fleeing.
e. You can handle the excess of command when power is granted to you.
3. GROUND: Take more land or customers (converts).
4. METHODS: Make your team of people work better together, communicate better, and be more efficient. Your people are seen as better trained and more professional.
5. HEAVEN: You have no control over this aspect, but it effects you. Do the “times” support your endeavor more or less than your competitor. How often do we hear of people that are “behind the times” or even “ahead of their time?” The result in both cases is the same – failure. It’s biggest relationship is to the courage of the leader as identified above.

These five are always a comparison to your competitors. They are meaningless without something by which to compare them against. They have no objective measure or value. People gravitate toward what they perceive to “better.” The key word here is “perceive.” It may not be real. At first, it’s often a façade, but over time it becomes real.

Put it to Work: The first thing you must do is determine where you are right now in comparison to your competitors. Naturally, it will be different for each competitor so you will have to compare yourself to all of them.

Fist, ask yourself who gets higher marks or more buy-in on the mission of the company. You or your competitor?

Second, ask yourself who gets higher marks for their command. You or your competitor?

Third, ask yourself who gets higher marks for having the most customers? Many people like to be with the “in” crowd.

Fourth, who has better methods?

Finally, who is better supported by the business climate or the emotional fad of the day?

If you honestly rate yourself against your competitor the current winner is obvious. You will notice that it’s not just who has more tally marks in each area, it is also affected by which is most important at the time of comparison. In some industries such as fashion, “heaven” or the emotional trends of the time are far more important than other factors and should receive higher consideration. You may want to establish a factor analysis before doing your comparison to keep you honest.

With the results of your analysis in hand, you are able to determine where you should focus your strategy to advance your position. You must be at least equal in all areas and better in the one that counts to win.

Strategy in everyday life: My day with CSI

To educate and entertain my two young sons, I recently took them to our local science museum for an exhibit based on the popular television series, CSI. This exhibit was unlike others we have visited. When you enter, you are given an evidence card and watch a brief video from the star of the show. What struck me during this interview is a statement he made. Let me paraphrase it as I can’t recall it as a quote. He said that dead victims are telling you what happened. The crime scene is telling you what happened. His advice? “Listen to the crime scene.”
 
Gary Gagliardi’s work in translating Sun Tzu’s The Art of War has uncovered four steps to advance your competitive position. They are (1) Listen, (2) Aim, (3) Move, and (4) Claim. In addition, one of the leader’s characteristics is that of intelligence. Intelligence is related to learning the ground on which you are, or will, fight. In business the “ground” is your marketplace, in sales it’s the customer, in politics it’s your constituents.
 
In short, a good leader has the intelligence to listen and learn about the ground on which he or she will meet the enemy. In sports, this is called the “home court advantage.” The advantage comes from having complete understanding and mastery of the location while the opponent has to learn it. If a bad guy broke into your home one night, you would have the advantage simply because you know the layout, where the kids toys are laying, and what’s available to you. The bad guy would have to learn all of this while simultaneously defending himself. This creates a division of effort that weakens him.
 
Returning to the CSI exhibit, you can see why the idea of “listening” to the crime scene made an impression on me. As I investigated the scene, I looked for what was present and more importantly, what I thought should be present yet was not. It occurred to me that a crime scene was similar to war. It’s all about deception. I took in the scene allowing it to influence me in the most obvious way. This would be what my enemy wants me to see and the interpretations he would want me to make. Sun Tzu says if you’re tired, appear rested. If you’re close, appear far away. He provides several examples of how we could or should deceive the enemy.
 
My crime scene was obviously telling me that the victim was killed in a car crash. After all, the car was crashed, the victim was in the driver’s seat, he was covered in blood with a head wound, and the windshield was cracked from the inside. I took in the evidence as it obviously looked and then began to question each piece assuming it was deception. As I uncovered more evidence, the “ground” was indeed speaking to me if would only listen. The killer was talking to me through his manipulation of the scene (ground). I imagined the killer walking me through the scene, telling me to look here and there. He was pointing out all the obvious reasons to assume this was just an accident. I then had the victim tell me what to look at. Then my imaginary contrarian partner told me what to look at. By listening to all of my advisors, I had a very complete understanding of the scene (ground). I felt confident I could make choices about what to investigate further and what to ignore (aiming). I took my list to the “lab” and began to run my tests (move). When done, I made an accusation in my “crime report” (claim).
 
I am no CSI expert but by using my training from The Science of Strategy Institute, I felt confident to listen (learn about the crime scene), aim (select what to focus on), move (investigate the evidence), and claim (accuse the probable killer) in order to solve the crime.

Manufacturing Luck

It was a typical day for school geek. While walking to his next class, he spotted the school bully just ahead. If he didn’t think fast, he was certain to end up inside another locker or some other painful and embarrassing situation. He quickly scanned the hallway and saw his math teacher round the corner and going his way. Quickly, he seized the moment and sidled up next to the teacher to ask a pointed question about today’s lesson. His conversation took him safely past the bully and to his next class. The bully sees the boy with the teacher and thinks to himself, “He’s lucky the teacher was there.”

A nicely dressed woman was walking toward her car after work. It was dark, too dark. She noticed that the street light had been shattered and since the glass still lay on the ground beneath the light, the vandalism was recent. It occurred to her that this was no random act. She immediately scanned the area and saw a dark figure approaching. With little time to react, she reached into her purse, put her phone to her ear and began to talk. She had no time to dial a number so she simply pretended to be on the phone with the police. In a voice loud enough to be heard by her attacker she said “Yes officer, the light was intentionally broken and somebody could be mugged! I have my gun here in my purse so I’m safe, but you should get somebody down here right away.” The would be attacker, hearing her conversation and seeing her hand obviously holding something just insider her purse, changed direction and kept moving. He thought to himself, “She’s lucky she made that call, or I would have had her.”

An investor, seeing that the housing market has collapsed monitors the declining values of homes and notices they have finally seemed to taper off. He found a few houses where people are willing to “rent to own” and signed short-term contracts with them. If the market returns, he will buy the houses, if not, he will let the lease lapse and get out of the obligation. In a few months, the market did begin to return. He immediately made the purchase on the rented homes for the price agreed to when leased and a few months later sold them for a handsome profit. When his friends got word of his new fortune they simply commented on how lucky he got in this tumultuous time.

You have probably heard successful people say they were “in the right place at the right time.“ While some people consider themselves lucky (and some are) most successful people intuitively put themselves in the right place at the right time. Strategy is all about learning to put yourself in the right place at the right time. This is the method for creating your own luck. In fact, we have a name for it. It’s called “positioning.“

We can dominate our competition in a way that they cannot fight us. We do this through our position. What we have to do is build a position that others cannot attack. Police reports tell us that most people are attacked on the street because they “look” like a victim. The easiest way to avoid being mugged is simply to not look like a victim. If you appear strong (it doesn’t have to be real as bad guys are not looking for a struggle any more than you are) you will be left alone. If you look as if you have nothing worth taking you will be left alone. The small retailer doesn’t get into a price war with Wal-Mart. The phone company doesn’t try to be more innovative than Apple. If we can build a position, so powerful, that others won’t attack it, we can remain successful.

When we say that you don’t have to perfect, just better than your competition, we are specifically talking about having a better position.

Leverage the mistakes of competitors to win.

Here’s another twist about competition; You don’t have to beat the competition to win – You just have to leverage their mistakes to be successful.

Sooner or later, everyone screws up. As a competitor, your job is to see those mistakes and take advantage of them. In fact, we will define opportunity as your competitors’ mistakes. The winner of a war has been defined as the side that made the second to last mistake.

Imagine a sports competition where both teams made no mistakes. The game would never end. In every sport, teams track their mistakes because they know that is the key to their opponents ability to win. In every sport where a ball is involved there is the phrase “dropped the ball,” which means you made a mistake that gave the competition an opportunity to win.

A competitor’s mistake could be something do or don’t do. If they mishandle a customer, that’s a mistake. If they focus on high quality they are ignoring everyone that wants low price. If they focus on low price they have to ignore those that want high quality. Anytime they do something that alienates a customer or supplier or employee, that’s a mistake where you can take advantage.

What they don’t do is just as important. If they don’t keep their storefront looking professional, don’t keep their stock up-to-date, or deliver their product, they leave an opening. Whatever they do or don’t do is your opportunity.

This is why we say that opportunities are limitless. It’s impossible for any company to cover all the bases. It’s nearly impossible to deliver a product or service without error. If you determine the type of mistake they could make that would benefit you most and then watch them until they make that mistake, you will always have opportunities to advance.

Put it to Work 1: Take a moment and write down what it means to “drop the ball” in your business. What mistakes could you make that give your competition a chance to take your customers business? In what ways could you give the IRS, city, lawyers, and anyone else a chance to win? What is a “fumble” in your business?

Put it to Work 2: In what ways could your competition “drop the ball” and provide you with a chance to win? How would you know they “fumbled?”

You don’t have to “beat” your competitors to win.

When people think about using strategy to improve their business, the first thing that comes to mind for many is a bag of tricks that allow them to beat their competitors. This is possibly the biggest misconception about strategy. It’s not about “beating” anybody. It’s about winning without fighting.

Strategy is really about leverage. You find ways to tap into the potential energy of your people, the situation, allies, the terrain, anything, and use that energy to achieve your goals.

Perhaps you envision a clever general or a titan of industry crushing their enemy. If asked to name some strategists you admire it would reveal a lot about your view of strategy. Do you conjure images of Donald Trump, Patton, Sun Tzu, Clausewitz, or Gordon Gecko from the movie “Wall Street?” Does your mind move to sports like football and soccer or games like poker and chess?

There is an old saying, “When two tigers fight, one dies and the other is wounded.“ Who really wins a price war? Neither side. Both lose in the long term. They both lose because they both lose profits and business is about profits. Even if you win a price war – fighting it is costly. If your business isn’t profitable everyone that supports it will lose. People will lose their jobs, investors will lose their money, and customers will lose the benefits you offer.

In boxing, the first rule is, “don’t get hurt.” You don’t trade punches like Rocky Balboa. You avoid going toe-to-toe and look for a way to win. Business is the same and it’s your duty as a business leader to achieve victory. The Sun Tzu is not an advocate of fighting. To the contrary, he was an advocate of not fighting.

The real strategist is one who sees fighting as a result of poor strategy. If you end up fighting your rivals you didn’t do enough to win without fighting. Now, you have spend time and money dealing with a competitor when those resources could have gone toward growth.

The philosophy of the Science of Strategy is to win without fighting. Rather than fighting your competitors to the bitter end, you want them to give up without a fight. You want your competitors to realize that fighting you is simply not worth the cost. You want competitors to know that you will always win and therefore resistance would be futile.

A good strategy is one that improves your position with small, unstoppable victories every day. In later posts, I will explain the word “position” in more detail. For now, think of it as your relationship with other businesses.

A successful strategy puts you in a position that is so dominate that competitors have no desire to fight you. For example, Wal-Mart holds a commanding position in terms of products and price. If you try to compete against them in these areas, you will always lose. It would be foolish to try. However, their product quality is low and they are not exactly on the cutting edge of trends. In these areas, you could easily win.

Put it to Work: How have you tried to “beat” your rivals in the past? If you’re in sales, did you undercut the price? Did you run a sale to attract customers? Did you get into bidding war with a competitor? Perhaps you offered more services, better guarantee’s, or promised more quality. Ask yourself if you are fighting against a position that you can’t win. If so, knock it off. The next post will tell you what to do instead.

The next time you feel pressure to fight a rival, stop and ask yourself “What could I have done that would make my rival concede without a fight?” Perhaps you find yourself trying to win a contract and are negotiating with the buyer, not so much over your price, but your price compared to your competitor. You feel pressure to lower the price, add more benefits, or whatever. Stop and think about how you ended up in this war. How could you have forced your competitor to give up on the contract long ago? How could you have moved the buyer from price to something where you have total advantage? If you were able to convince the buyer that your experience was far more important than price, there would be no fighting and you wouldn’t have to “beat” the competition.
Here’s a warning. Don’t get stuck in a predictable rut. If you always focus on your experience, your competition will be expecting it. If you feel they are expecting it, switch to price or some other factor. When they show up and demonstrate that price is more important than experience, your buyer should respond that it’s not your experience that counts but your contacts at the city planners office. They won’t see it coming and once again, you will win without fighting. When this happens, you’re a true strategist.

Strategy Books and Courses are a Waste of Time and Money

Here is my proposition. Classes and books on strategy, for the most part, are a complete waste of money and time. It is the rare professor that can teach you strategy. They understand it like an economist understands business. Economists can’t predict much. They look at what happened and explain it. These nitwit professors of strategy look at successful companies and then explain their success. Then, they tell you to do the same thing. It’s asinine and you’re an idiot for buying their books and taking their classes.

The next level of charlatan is the successful business person who sells his or her strategy. They get lucky and pick the right strategy at the right time. They then sell that business and go on a speaking tour. Their old business sticks to the same strategy season after season and when the times change, the business fails.

The purpose of this post is to wake you up to all the garbage people are trying to sell you. I don’t have a book, a strategy consulting business, or a movie to sell you. I have a real business that has to deal with real competitors and use strategy to win. You should do the same.

If you have read a book or taken a course on strategy and still don’t know how to deal with a specific competitor – demand a refund. Call the teachers, authors, and professors of a course or book and tell them you have a real competitor that is doing real damage to your business and want to know if their course will teach you how to deal with them. The answer you will get is predictable. They will tell you their class will teach you the fundamentals of strategy and how to evaluate your specific situation, but you will have to figure out the strategy on your own. Bullshit! If you call me with a real competitor doing real things, I can tell you exactly how strategy would guide you. I how to do it and I know it works because I do it every day.

We are business people, executives, and managers that have to make real-time decisions against the actions of real rivals that want to undercut our business and take our customers. Quit getting fooled by a bunch of well told stories of success.

When you have a teamwork problem, a process problem, or even an interpersonal problem, there are several resources that give you specific advice on how to proceed. Not so with strategy. Nearly every book and class on strategy talks about strategy and spends five chapters defining it. What they never do is tell you how to handle a competitor. They only offer generic advice about being better. My last post provided real advice on where you need to better.

It seems that when you look for a resource to teach you how to create a business strategy, all you get is nebulous recommendations to make a business plan. However, business plans implement strategy, they don’t define it. Stupid advice. People will tell you to pick a strategy such as low-cost provider, highest quality provider, and so on. More stupid advice. It reminds me of a comedy bit done by Steve Martin where he claimed to know how to have a million dollars and never pay taxes. His system? First, get a million dollars. Next – don’t pay your taxes. Great strategy. When you read books on strategy today they give the same advice. First, pick a strategy. Next – execute that strategy. If you have any trouble, read their next book or hire them as a consultants.

Let’s imagine that you own a business. If you do, you have direct competitors. That is, there are other businesses out there that are actively trying to take your customers. What do you do?

Search the web. Try to find some solid advice on how to compete against a specific competitor. Go on, I will wait for you. What did you find? Very little I imagine. If you own a dry cleaning business, a doctor’s office, plumbing, restaurant, hospital, or whatever, and you have a direct competitor you need to deal with, good luck finding advice on how to win.

The best advice you will find is how to improve your customer service, your quality, better internal processes, finance solutions, and so on. Everything is focused on how to make your business better. The question is, better than whom? If your service is better than your competition already then you’re wasting your time and money. If your quality is higher than the competition, you would be wasting time and money. If you’re already better, you don’t need those books. Quit buying them! They are also a waste of your time and money.

Look at some of the top selling business books like “Good to Great,” where are the companies that are so perfect? Bankrupt or gone. Some companies cheat and win. Most stumble onto a good strategy that works for a while but eventually stops working. There is no such thing as a long-term winning strategy. Strategy is about making decisions today. There are no decisions in the future. If a decision is made today and not changed as the situation changes then it eventually becomes a losing strategy. Always.

Most of the top selling business books are about making decisions. Finally, a topic that will help develop strategies. However, these books are confined to how decisions are made and not prone to explaining how to make better decisions. The rest of the books are on finance and teamwork. What none of them tell you is how to deal with a competitor.

Put it to Work: Try to find books and courses that teach you how to develop a strategy to deal with a real competitor. Let me know if you actually find one. Call a course instructor or professor and tell them you have a specific rival and want to take their class but first you want assurance the course will tell them exactly how to develop a strategy against that rival. Guess what the response will be ahead of time.

You don’t have to be perfect – just better than the competition.

How many times have you heard the joke about two men on mountain walk that stumble across a bear. One many stops and puts on his tennis shoes. The other man remarks “Why bother, you can’t fun faster than a bear!” To which the first man replies, “I don’t have to be faster than the bear, just faster than you.”

This captures one of the important lessons of strategy. You don’t have to be perfect – just better than the competition. Business mediocrity is well-known today. How is it that companies that offer poor service and bad products stay in business? Take a look at the roster of failed CEOs that have no trouble getting hired to run another company into the ground. Why is McDonald’s the top restaurant chain when their food is so bad? Look around you. How many products do you have that truly suck? Yet, you keep buying them. You put your kids in a school that is known for poor performance. You go to a job every day that you can’t stand.

Every time you buy a product you know isn’t perfect, you mutter to yourself that “it’s better than what else is available.” Monopolies can offer poor products and services because they know you can’t go anywhere else.

Are any of these businesses perfect? No! But, they are all better than their competition in some ways.  They didn’t win because they were the very best at everything. They won because they were the best at what counted when it counted most. Maybe you go to McDonald’s because the location is convenient. You use the dry cleaner near your home. You join a fitness club because it’s close to home or work. Your kids attend the local school because it’s there.

Most of the businesses you frequent every day are in business because of one or two factors that outweigh all the others. You complain, you exchange, you wish for something better, and it never comes.

Think of a business you use that you are really unhappy with but keep returning anyway. Now, why do you go there? I will bet it’s because of one factor. I don’t know what it is but I can guess it’s either close to you physically or mentally, easy to get to or work with, has a large selection or is the only place that carries exactly what you want.

Let me put these in easier terms. A business can be:
1. Near you physically rather than far away
2. Familiar to you rather than an unknown entity
3. Easy to work with or access (think Amazon)
4. Has a huge selection
5. Has the precise item you want when nobody else does

That’s pretty much it, isn’t it? In nearly every case the reason you use a particular provider is due to one of these five. Sure, they may satisfy more than one, but there almost always just one that makes it your preferred vendor even if you don’t really like doing business with them. If you reverse these five, you will have a business nobody visits. How many businesses do you deal with that are far away, unfamiliar, don’t have what you want, or are a pain to deal with? None. Let’s examine each of these.

The “corner drug store” survives because it’s on the corner. It’s right there. You pass it every day and don’t have to drive a half an hour to reach it. You don’t go to other stores very often because it’s simply too inconvenient to drive so far when you’re tired after work.

You keep eating at the same restaurant because you know what to expect. You know the menu, the waitress, or even the owner. It’s comfortable. You don’t eat at the new restaurant in town because you don’t know if it’s any good. You’re not familiar with the food or the people. It’s human nature, we like the familiar.

Amazon is popular because it has a huge selection and it’s easy to do business with them. The magical “one-click.” You stop off at Burger King instead of a better restaurant at lunch because it has an easy entry and you can just drive through and eat. The other place means you have to go two more blocks, do a U-Turn, find parking, and go inside to order. It’s just too much of a hassle.

Home Depot, Office Depot, Sports Chalet, and many others do so well because they offer a huge selection. No matter what you need, there it is. Maybe it’s not exactly what you need, but hey, you can get toilet paper, pens, and a new computer all in the same building.

Yes, Office Depot has pens, but not your favorite Mont Blanc. That’s why you drive all the way across the city to the Mont Blanc store to buy your very special refills.

In strategy we know that if we want to win we don’t have to be perfect, only better…than our competitors. You don’t have to be the fastest person in the world to win a race. You only have to be faster than everyone else competing on that day. You don’t have to have the best restaurant in the world. Just the best within driving distance. You don’t even have to actually be better in many cases. You only have to be perceived as better.

One key to success is simply knowing which of these five factors are the most important for your potential customers and then be better than everyone else. You do this and your sales will sky rocket. If you don’t, you’re out of business.

You should be mad because you have probably seen a hundred articles and a dozen books that makes this very simple concept complex. How many “marketing experts” spend pages telling you to improve on all of these? How many take 300 pages to tell you how improving one of these (which ever one is favored by the author) will change your business? How many books are written on the importance of amazing customer service when people primarily frequent your store or business simply because it has better parking!? I’m not saying you can perform poorly in all but one of these. You have to be at least as good in all of them as your competitor but only have to “wow” your customers in one. In addition, the one you have to be the best at is not even up to you. It’s up to your customers.

If a competitor moves in next door, you have to be better than them in one of these areas. If you can’t, then change your approach. If they offer a bigger selection then they can’t specialize. If they specialize, offer a bigger selection. If they’re unique, be familiar. If they’re familiar, be unique.

Put it Work: Remember, everything is relative. You are only better because your competition provides a comparison. Choose one or more competitors. In what ways are you “better” than your competition? In what ways is your competition better than you? This is not exercise of the ego. You will always be better or worse at something when compared to others. Consider where you are actually better and where you are only perceived as better (or worse). The trick here is to know how your customers will compare you to your competition.