The 'Strategic Triangle'
I've been studying the 'strategic triangle' concept recently. That's the exact spot where you meet your customer and your competition head on and, from what you know about both, begin to determine your sustainable competitive advantage.
Kevin P. Coyne, in an article that ran in "Business Horizons" (Jan-Feb, 1986) titled Sustainable Competitive Advantage-What It Is, What It Isn't, says "For a producer to enjoy a competitive advantage in a product /market segment, the difference or differences between him and his competitors must be felt in the marketplace: that is, they must be reflected in some product/delivery attribute that is a key buying criterion for the market."
In his book "Jump Start Your Business Brain," Doug Hall discusses the idea of 'key buying criterion' in these terms: "Sales and profits explode when an Overt Benefit and Real Reason to Believe pair is offered with a Dramatic Difference. Without uniqueness, you have a commodity that sells for commodity-like profit margins. The new news is that for the uniqueness to be effective it must be dramatic-ten times bigger than you think it needs to be-and the drama must be focused directly on the Overt Benefit and Real Reason to Believe."
From my workbook "Your Phrase that Pays":
"Assume a customer wants to make a purchase. She knows of two stores in her marketplace that sell what she wants to buy, Business X and Business Y. She knows this about the two businesses:
1) They are directly across the street from one another;
2) She believes that both sell identical versions of the item; and
3) Business X is selling it for $100 and Business Y is selling it for $130.
"Given these facts, from which store will she most likely make her purchase? From which store would you buy if you were the consumer?
"Business X is the choice she can be expected to make because the only difference she is aware of is the 30% difference in price. If there is no other difference, if she perceives the item to be a commodity, why would she pay an additional $30? Would you pay the $30 premium?"
My guess is, you wouldn't pay the extra $30.00.
Consumer will pay more for a benefit they cannot get at a lower price point if they understand the value of the benefit. Consumers know that providing a true sustainable competitive advantage costs you time and money; if the benefit is important enough to them they will pay a premium to obtain that benefit!
How do you discover your sustainable competitive advantage, a benefit only you can provide or claim to provide that consumers care so much about they will purchase it from you at your higher price point? You analyze your strategic triangle.
Thanks, and sell a bunch!
Kevin P. Coyne, in an article that ran in "Business Horizons" (Jan-Feb, 1986) titled Sustainable Competitive Advantage-What It Is, What It Isn't, says "For a producer to enjoy a competitive advantage in a product /market segment, the difference or differences between him and his competitors must be felt in the marketplace: that is, they must be reflected in some product/delivery attribute that is a key buying criterion for the market."
In his book "Jump Start Your Business Brain," Doug Hall discusses the idea of 'key buying criterion' in these terms: "Sales and profits explode when an Overt Benefit and Real Reason to Believe pair is offered with a Dramatic Difference. Without uniqueness, you have a commodity that sells for commodity-like profit margins. The new news is that for the uniqueness to be effective it must be dramatic-ten times bigger than you think it needs to be-and the drama must be focused directly on the Overt Benefit and Real Reason to Believe."
From my workbook "Your Phrase that Pays":
"Assume a customer wants to make a purchase. She knows of two stores in her marketplace that sell what she wants to buy, Business X and Business Y. She knows this about the two businesses:
1) They are directly across the street from one another;
2) She believes that both sell identical versions of the item; and
3) Business X is selling it for $100 and Business Y is selling it for $130.
"Given these facts, from which store will she most likely make her purchase? From which store would you buy if you were the consumer?
"Business X is the choice she can be expected to make because the only difference she is aware of is the 30% difference in price. If there is no other difference, if she perceives the item to be a commodity, why would she pay an additional $30? Would you pay the $30 premium?"
My guess is, you wouldn't pay the extra $30.00.
Consumer will pay more for a benefit they cannot get at a lower price point if they understand the value of the benefit. Consumers know that providing a true sustainable competitive advantage costs you time and money; if the benefit is important enough to them they will pay a premium to obtain that benefit!
How do you discover your sustainable competitive advantage, a benefit only you can provide or claim to provide that consumers care so much about they will purchase it from you at your higher price point? You analyze your strategic triangle.
Thanks, and sell a bunch!
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