Differentiate Yourself!

How to Compete: Be Unique!

Michael Porter of Harvard has conducted landmark studies of competitiveness–of companies, regions and nations. It’s good news for us that he has also written about strategy and the Internet, and how to compete on the Internet. His analysis is worth considering.

Alternatives

Porter describes two principal options for competing on the Internet: operational superiority and strategic superiority.
Operational superiority is obtained by doing something better than anyone else. On the Internet there’s a great opportunity to be very efficient and deliver quickly and at low cost. Amazon is a great example of operational superiority: for years, they kept borrowing to fuel ever-greater expansion, seeking their “sweet spot” where they would have enough volume that they’d be profitable. And, finally, they achieved it. They’ve now achieved it, and the operational superiority they’ve built in the meantime now makes them a formidable competitor.
The alternative, strategic superiority, is obtained by doing some specific thing better than anyone else. That specialty makes you the supplier of choice for the specific thing that you do best. Take a close look at your competitors on the Internet, concentrating not on how you are similar, but how you are different. How can you build on those differences to be best for some particular part of your market?
Happily, the Internet is a huge marketplace. When you seek to go head to head against a strong competitor, you’re attempting to divide the market segment where they are already established. You’ll have to fight hard for everything you get, and your entry is likely to provoke a response from your competitors, making things even more difficult for you.
On the other hand, if you go after your own niche, you’re not such a direct threat to your competition, and you may not get a competing response from them at all. This will allow you to pursue your chosen market segment all by yourself. Or at least with less competition than you might otherwise have.
You can also look at this issue more narrowly in terms of query terms where you compete for search position. You can find out the terms your competition has high ranking for in search engine results; then go after other terms that are widely used. And if your established large competition has position on two-word terms, go after high ranking for three-word terms that re more specialized, instead of meeting them where they are strong.
In order to get this marketing advantage, you’ll need to actually look at the marketplace, find out who is operating in it, and decide how you will differentiate yourself. This differentiation then can form the heart of the strategic plan for your company.

The Bottom Line

The Internet connects you directly to a marketplace of almost unlimited size. Capitalize on this advantage by going after your own niche rather than the niche held by an established, larger competitor.

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