By Dr. Ben Lerner
Chiropractor, Masters in I/O Psychology, PhD candidate in Business Administration, and Certified Executive Coach
A COMPANY’S COMPETITIVE STRATEGY IS THE SUCCESS PLAN. While, for example, chiropractors tend to argue over dogmas and techniques, businesses focus on how to ideally position themselves in the market, satisfy their customers, and gain a competitive advantage so they can exceed the competition.
HOW TO CREATE A COMPETITIVE STRATEGY LIKE THE BIG COMPANIES:
The two biggest factors:
- Do you want to reach or is your product designed for a broad or narrow market (Walmart and Starbucks are very wide, BMW, boating equipment, and Tiffany’s are more narrow)
- Is it lower cost or differentiation (explained below)
When you take your 600 to 800 level business classes, you often find Michael Porter not just being quoted, but accepted as the fact leader in strategy and assessing the functionality of your brand. His 1985 seminal work in the book, ‘Competitive Advantage: Creating and Sustaining Superior Performance’ has been quoted in multiple textbooks throughout my PhD in Business program.
In reviewing the world’s top companies, their strategies fall into one of 4 different categories (There is a 5th, hybrid model not discussed here):
- Low-cost provider strategy – provide lower costs than your competitors on similar products that attract a wide range of people because you’re cheaper. Think Walmart, Super Cuts, and 5-Below
- A broad differentiation strategy – seeking to differentiate the company’s product offering from rival’s products by offering superior attributes that will appeal to a broad spectrum of buyers. Think Starbucks and Panera; better coffee products and bread in a more favorable surrounding. Both companies offer products a very wide range of consumers enjoy.
- A focused low-cost strategy – concentrating on a narrow buying segment or marketing niche and outcompeting rivals on costs. Ie; serve a niche marketing at a lower price than others. An example is SeaDoo. They offer jet skis for as little as 25% of other products in the market.
- A focused differentiation strategy – While many companies focus on cost leadership as a competitive advantage strategy, others’ main goal is to stand out from the crowd with something unique that differentiates them from the rest. The goal is out-competing rivals by offering customized attributes that meet their requirements better than others. This is Apple, who has reached earnings higher than all of the other companies. Other examples are Tiffany’s, Emirates, and Tesla. I ALSO BELIEVE CHIROPRACTORS SHOULD USE THIS STRATEGY
According to Porter, this is the creation of new and unique products or services that create exceptional value for their customers who in turn are willing to pay a premium.
WHAT MAKES THESE FOCUSED DIFFERENTIATION COMPANIES STAND OUT?
- You receive more items and services with your purchase than competitors that add exceptional value, there is satisfaction from the big 4: product, service, out-comes, and experience. design, visual appeal, quality, on the leading edge of technology, environmentally friendly, scarcity, incredible branding, and over-the-top customer service such as the Apple Genius Bar or what you get on an Emirates flight: over the top entertainment (4,500 movies), an exceptional focus on you as an individual, and free stuff.
While chiropractors should follow differentiation strategies, there is a very big push for chiropractors to stand out by being “Low-cost providers.” Sure, Walmart is the biggest company in the world and therefore this makes sense. That strategy, however, gets tripped up by multiple issues.
- These are people’s lives and not where you get a cheap toaster or a huge bag of Doritos for 99 cents. Providing and generating value for care is super critical.
- Chiropractors are trading time for money. In a service industry, you have to provide time and there are only so many hours or so much energy in a day. If you keep the cost low, you put a super low ceiling on revenues with a higher incidence of burnout.
- DON’T COMPARE YOURSELF TO WALMART! Walmart doesn’t sell junk. You buy the same things you buy in less popular stores only cheaper. They are able to execute this through industry leading administration policies and how they manage what is called the “Value Chain.”
(A Value Chain: Every company consists of a collection of activities undertaken in the course of producing, marketing, delivering, and supporting its product or service. The value chain identifies the primary activities and related support that create customer value. Most large companies, never mind the average clinic, can keep up with Walmart’s administrative skill-set, and shouldn’t try.)
THE RIGHT STRATEGY CAN TAKE YOU FROM MAKING HUNDREDS TO MAKING MILLIONS. WE LOOK FORWARD TO HELPING YOU CREATE THE BEST STRATEGY TO MAXIMIZE YOUR IMPACT AND YOUR INCOME WHILE MINIMIZING THE STRESS AND THE WORK.
Have fun saving the world
Dr. Ben
