Key Strategies to Differentiate Your Company

Unveiling Distinctiveness: Key Strategies to Differentiate Your Company
Setting your company apart from the pack is not just desirable; it’s imperative for leaders looking to create sustainable high growth. With so many businesses vying for attention, standing out matters to get above the noise. But what key strategies to differentiate your company make sense within in a sea of similar offerings?

Key Strategies to Differentiate Your Company Examples
In the drive to be better, faster, or cheaper, let’s take a look at three of the largest discount retail chains competing against each other: Walmart, Target, and Kmart.  On the surface, each seems to target cost-conscious customers with the promise of the lowest prices (cheaper) but approaches and results have varied greatly between the three.

• Kmart
  Kmart debuted as a discount store prototype that offered low prices, large parking lots, late hours, clean stores, and name-brand merchandise. When the first Kmart opened in 1962, over 4,000 customers waited in line to be the first to shop.  In the next four decades, Kmart opened over 2,400 stores.  Sadly, Kmart declared bankruptcy in 2002 and only 2 U.S. stores remain today.

  What happened?

  We surmise that Kmart failed to truly differentiate itself and consistently support that differentiation.  It was trying to stand apart by offering everyday low prices on a wide range of products.  We know from our organizational alignment research, however, that is not enough to set Kmart apart in the eyes of its buyers.  Every major player in the discount chain market can make that claim.

  While Kmart attempted to differentiate themselves through exclusive brand deals with celebrities like Martha Stewart and Kathy Ireland, they have been unable to sustain the position of low cost leader.  Their offerings have been commoditized, and their margins have eroded due to price wars and trying to be “all things to all people.”

  That is the opposite of having a unique value proposition that sets you apart from your competition.

• Walmart
  In the same space as Kmart and starting in the exact same year, Walmart has become the largest retail chain in the world with over $620 billion in revenue and is almost twice the size of Amazon. Walmart’s original unique value proposition was set forth by its founder: “Save money, live better.”  Like Kmart, the slogan is not enough to differentiate itself from the pack.

  So why has Walmart been so much more successful that Kmart?

  For starters, Kmart has tried multiple strategies and brand promises while Walmart has stayed true to always having low prices without special sales or discounts since its inception.  Strategically, Walmart focused on suburban communities where they could undercut Kmart’s prices due to lower overhead while investing heavily in the systems and processes to drive lower prices.

  Everything that Walmart does aligns with its chosen way of creating market value from its hiring practices, ideal target clients, internally focused business processes, and vendor management systems.

• Target
  Another competitor that started in 1962, Target, also strives to save its customers money. But they go about it differently.  They purposefully go after a younger, more urban, and more image-conscious customer base than Walmart and strive to provide fashion-forward merchandise.

  To win over this unique demographic, Target focuses on being a cheap chic fashion-forward company.  While Target matches some prices with Walmart and other low cost retailers, they carry a purposeful assortment of higher priced items that are attractive to fashion-conscious shoppers.

  So, while Walmart is generally cheaper, has a larger selection, and is closer to more people, Target is considered cleaner, has better service, and offers more high quality products.  Their in-house brands combined with higher quality and higher margin items has allowed Target to be much more successful than Kmart.  Target now has over $65 billion in revenue, over 1,900 locations, and solid year-over-year profitable growth.

3 Key Strategies to Differentiate Your Company
While there are many different ways for companies to differentiate themselves from the competition even under the category of “cheaper,” there is a proven process to follow to make it a reality.

1. Clearly Define Your Unique Value Proposition
   At the heart of strategic clarity and differentiation lies a crystal clear understanding of what sets your company apart. Craft a compelling Unique Value Proposition that succinctly communicates the believable value you offer to your customers. Your Unique Value Proposition should address key pain points of your ideal target client and highlight the meaningful benefits they’ll receive by choosing your products or services over competitors’.

   Do you know what truly sets you apart in the eye of your target customers?

2. Fully Support Your Unique Value Proposition
   A Unique Value Proposition is little more than a slogan if your company cannot consistently deliver it. To be potent, a Unique Value Proposition must be aligned with your company’s mission, vision, and values and be backed by a deep organizational commitment from the C-Suite to the frontline.  we know from organizational culture assessment data that the way people think, behave, and act must fully align with your promise of better, faster, or cheaper.

   Does every aspect of your employee and customer experience align with your unique value proposition?

3. Consistently Innovate
   With the speed of competition today, innovation is required for sustained differentiation. Leading companies stay ahead of the curve by continually innovating their products, services, business practices, or business model. Whether it’s introducing new features, adopting cutting-edge technologies, or revolutionizing customer experiences, innovation breeds lasting distinction.

   For example, Walmart’s supply chain innovations of barcode scanning technology, data-driven decision making, and virtual try-on technology help to keep it ahead of the pack. Target continues to innovate through omnichannel delivery options, store redesigns, small store formats, and corporate partnerships with iconic brands like Disney.

   Do you have a culture of innovation to keep your Unique Value Proposition relevant enough?

The Bottom Line
Instead of trying to appeal to everyone, focus on serving a specific niche market exceptionally well. By narrowing, you can tailor your offerings to address the unique needs of a particular segment of customers. This targeted approach allows you to establish yourself as an authority and reduces the threat of direct competition.

To learn more about key strategies to differentiate your company, download Unique Value Proposition and Differentiation – What Sets You Apart?