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Strategy is not optional – it’s the lifesaver for your business. While it’s tempting to get lost in the numbers, margins, and growth rates, these metrics alone won’t set you up for success. You need a comprehensive plan that goes beyond the numbers and aligns with your company’s core strengths and competitive landscape.
Perhaps the most important a part of this process is identifying area of interest industries where your company can do things no one else can. The goal is probably not as fanciful because it seems If you follow the process. Different firms approach this in alternative ways, but the most successful ones typically follow five key steps.
Step 1: Identify competitive aspects
Start identifying the universe of competitive aspects in your industry. Don’t limit your evaluation to what your company does; define your competition broadly. For example, if you own a coffee shop, your competition is not only Starbucks and Dutch Bros. Your competition is anyone who offers coffee, from a gas station to McDonald’s.
Consider what makes your company stand out and your competition. Is it about the price of coffee, the atmosphere in the cafe, the speed of service, the use of environmentally friendly products or social involvement? Write all of it down now; we’ll prioritize this later.
Step 2: Brutally honest self-assessment
Time for some tough love. It’s easy – and truthfully, natural – to consider that you’re the best in every category. But let’s face it: you probably aren’t. Collect feedback from your customers and competitors’ customers using surveys. You may use tools comparable to strategic canvas.
The first step in the strategy canvas is to rate yourself and your competitors on a Likert scale from 1 to 5. There are many ways to self-assess. Consider hiring an outside consultant for an unbiased assessment. Encourage your team to give honest feedback and create an environment where they feel protected to be vulnerable and honest. Analyze online reviews and opinions on social media. These platforms can offer a wealth of data about how customers perceive your company.
To ensure accurate scoring, you also need to understand your competition. Visit their stores, browse their website, read their reviews, try their products and objectively evaluate how they perform for you. It’s not about copying them, but about understanding where you stand in comparison to the competition and identifying areas for improvement. A strategic canvas or other self-assessment tool is not about patting yourself on the back – it’s about identifying where you really excel and where you don’t.
Step 3: Identify your superstar factor
Now use this information to determine your competitive advantage. Focus on cost leadership, differentiation or targeting a specific industry segment. What’s your magic?
Consider less visible strengths your company may have. These may include specialized knowledge, unique customer support practices, modern production methods, or even a particular corporate culture that resonates well with your audience. In a crowded market, finding an uncontested and underserved market space allows you to build a loyal customer base and defend your position against larger competitors.
Sticking with the coffee shop example, possibly your superstar power is sustainability. As a smaller, more flexible business, you can source your coffee beans directly from local organic farms, ensuring the highest quality and freshness while supporting local agriculture. Starbucks, serving tens of millions of shoppers around the world, simply cannot compete in the same way because it does on a regional level.
Step 4: Use your competitive advantage
Now that you’ve identified a area of interest in which you can dominate, don’t waste resources strengthening weak areas where you’ll never lead. At best, you may only gain a minimal advantage over your competitors or fall barely behind. Alternatively, you could consider improving areas where you are on par with the competition, comparable to investing in brick-and-mortar locations to gain an advantage. However, it is also a dangerous proposition and your competitors could also be doing the same – without gaining much from the other.
Instead, double down on your strengths. It’s not about simply maintaining; it’s about setting the pace. Find the gaps your competitors are neglecting and claim them as your own. By strengthening what you already do well, you can create a clear competitive advantage that may set you apart in the market.
As a sustainability café, goal college campuses and make sustainability and community engagement your banner. Your unique selling proposition can resonate deeply with your student body, creating loyal customers who appreciate your coffee and your values.
Step 5: Overcome the “business ego”
Challenge your business ego. Sure, love your brand, but be realistic. It is probably not realistic to compete with giants like Peet’s Coffee, whose parent company has a market capitalization of around $10 billion. You won’t outdo Peeta Peeta coffee overnight, and you may never do it. Instead, find a area of interest you can dominate. In this case, strive to be the greenest coffee shop on college campuses.
Other firms face similar ambition challenges. A wealth manager may dream of serving only the ultra-wealthy, but competing with Goldman Sachs and Morgan Stanley is probably not realistic at an early stage. Instead, focusing on a area of interest like teacher financial management may very well be a smart move.
Embrace the process
Building a solid strategy takes labor, reflection and a willingness to adapt. Forget about being a small fish in a big pond and consider a recent pond. Remember that it is higher to dominate in the open water than to wade in a bloody, red sea of competitors.