Competitve Advantage

Not A Moment of Thought

This morning, I have been watching two Mallard drakes chase each other around the wetland area near our house.  One duck is clearly obsesed with chasing another one from the pond, forcing his nemesis into the deep reeds.  All the while, the two hens are being courted by a third duck that just arrived.  Had the dominate drake payed attention to the hens he had claimed then perhaps he may have not been usurped by a stealthy opportunist.

Typically, as a company grows larger it spends more money on market research and analysis of its competitors.  Numbers are sliced every conceivable way.  The more effort that is put into market research, the less innovation takes place and suddenly everyone is at a square dance responding to the same caller.  The real trick is to maintain the entrepreneurial spirit and chemistry.  If you dedicate yourself and your cause to fixing the problem that ultimately energized you to launch your enterprise, you are on track.

Are you giving your competitors a moment of thought and chasing them around the pond?  Are you staying focused on your purpose or distracted by those in your peripheral vision? 



I cycle past a real estate sign listing vacant land as part of a regular riding route.  The realtor’s sign had been twisted by the wind and tagged with graffiti.  To my surprise I saw new signs when I passed the lot yesterday.  Across the street was a new listing from a competitor.  The new realtor’s sign was larger and composed of graphics and pictures.

 The sudden appearance of a competitor was a reminder that if you are not attend to your competitive advantage another organization can come along and corner the market.  The realtor with the original listing and the abandon sign was playing catch-up.  The ‘dip’ that the competitor had to cross (as Seth Godin would say) was so small that it took few resources to change the game.  Had the first real estate listing been more active and attended on a regular basis, perhaps it would have made it harder for the new listing to standout.

Assignment

Could you describe your competitors in detail?  If the idea of competition makes your organization nervous, are there organizations you consider good benchmark’s for your cause?  Do you really understand how many volunteers they engage and the techniques they use to retain donors?  Have you read their annual reports?  Does somebody from your board attend a competitor’s programs?  Do you access their financial returns online or use their compensation structure for benchmarking salaries?


Assign staff, board, volunteers to get to know a competitor better.  Encourage them to assemble a portfolio of information and make a presentation of their findings.


If your organization wants to understand its competitive advantage you need perspective.  Many organizations only engage in competitor analysis once every five or ten years during strategic planning but the opportunity to renew your understanding today only enhances your day-to-day decision making.

Managing Change

The drugstore Walgreens grew from around 200 stores to over 500 during Prohibition.  The most significant catalyst for the store’s growth, they were able to fill prescriptions for medical alcohol.  In Daniel Okrent’s book, Last Call: The Rise and Fall of Prohibition, he unveils a series of Prohibition loopholes that have impacted everything from the creation of the woman’s powder room to bar closing times to the very brands that are considered the market leaders today.  Sometimes the market creates opportunities that nobody anticipated.

Zoo

I just returned from a four-day Second Grade spring trip that culminated with an overnight at the Pocatello Zoo.  Speaking with the zoo administrators at the end of the trip, they told us that Pocatello Zoo is one of ten in the nation that focuses exclusively on native animals found in the state of Idaho.   The animals in captivity are ones that cannot survive in the wild due to injury or other constraints.  To put the market in context, the Association of Zoos and Aquariums estimates that there are 2,400 animal exhibits running nationally.  


When considering ways to stand out from the crowd and enhance your competitive advantage consider the Pocatello Zoo.  By focusing on native species they are no longer in direct competition with the rest of the zoos in the region.  There is no need for a new tiger or giraffe which come at tremendous cost.  They are educating the public about what one can expect to find in the very hills and valleys behind the zoo.  A subtle paradigm shift from the traditional zoo changed their market.

Photo Credit: Pocatello Zoo Website

One Call, That’s All

“One call, that’s all” is the motto of a local personal injury attorney, a plumber, and a window cleaner in our community.  I am sure there are more businesses who use the catch-phrase.

It makes me wonder how many social sector organization’s catch their clients, donors, volunteers, interested community members on the first call.  I often hear from volunteers who say it took many calls and even a personal visit before they were assigned a volunteering opportunity.  Donors who wish to ask a few questions before making a contribution speak of playing automated telephone system hopscotch.  Individuals calling to enroll in programs share colorful experiences of trying to complete the registration process.

The attorney catches the client on the first call because it means a potential windfall.  Why are many social sector organizations not meeting the same standard?  If you are congratulations, it is part of your competitive advantage! 

Facebook vs. Google

How quickly can your competitive advantage erode?  A Wall Street Journal article detailed the steps that Facebook and Google’s Gmail are taking to customize their features to look more like their their competitor.  Changes to status updates, email inbox and their respective layouts are starting to erode the competitive advantage between the two companies.  It appears that once one company started to cross the design lane that separated the two, the other company moved immediately moved closer.  Competitive advantage is not a protective blanket if it can be easily duplicated.  Real competitive advantage needs to have a serious moat in front of a castle.  Force a competitor to swim across and try to scale the walls.  If you have a well designed competitive advantage then you will force another organization to expend significant resources to try and challenge your position.

Planes vs. Trains

When I attended a school in New Hampshire and wanted to get back to visit my parents in New York there was no doubt that you took the shuttle between Boston’s Logan Airport and New York LaGuardia. The flights ran every hour and there was even a guarantee that they would roll-out another plane if the first one left completely full. The service was quick, the price was inexpensive and it felt as if you ascend to a cruise altitude and then immediately descend and land. Nothing compared to the speed and the ability to customize schedules. Reservations were not required, just good timing.

I read today in a New York Times article that USAir is disbanding its stationed shuttle pilots and ground personnel at both LGA and BOS. The new plan is to fly regional air jets that connect from other cities in place of the planes (larger Airbus planes) that simply ferried passengers between three cities (Washington, DC was the other option). Now the plane leaving Philadelphia to New York will need to be on-time in order to board as the equivalent of the “shuttle” flight to Boston. The prices has raised to beyond reasonable. In reality this has become just another flight with service a little more frequently as the heavily traveled New York to Chicago route.

By diluting the competitive advantage of owning the corridor now new forms of transportation have benefited. The Amtral Acela offers a variety of levels of service and in three hours and thirty minutes can have you from downtown New York to the Back Bay of Boston. I do not pretend to understand the airline industry but it appears that one airline’s demise is not really another airlines opportunity. Instead passengers are turning to other forms of transportation. In Washington, DC this summer I saw buses advertising $9 fares between the nation’s capitol and the Big Apple. When you start to calculate the cost and time associated with a tax to the airport, TSA screening, the less stripped-down flying experience, and then reversing the arrival scenario the move to trains and buses makes sense. Amtrak’s TV spot spends as much time knocking flying as it does promoting its product.

I would call this a sea change, a paradigm shift or at least an opportunity. What may take place in your sector that could make you wildly relevant or suddenly insignificant? Are you creating a future that includes your enterprise as a leader?