Editor's note: Joe Urbany is professor, Mendoza College of Business, University of Notre Dame, and co-founder of Vennli Inc., a South Bend, Ind., software firm. He can be reached at firstname.lastname@example.org.
Markets get commoditized very quickly these days, and competitive advantage is often fleeting and complex to define. But it is possible to analyze and take action on differentiation in a data-driven and visual way to engage the team and streamline decision-making.
Here’s a scenario we’ve seen hundreds of times, using a visual method to take action on competitive strategy and differentiation. The case is hypothetical but based upon patterns observed in many actual cases.
The analysis is generalizable to any context (whether B2B, B2C, nonprofit, product, service, etc.) in which a customer makes a choice among competitive options. Your revenue growth and financial results depend upon bringing the customer’s choice your way.
Very Good Inc. (VGI) is a successful manufacturing concern selling machined parts used as inputs by other manufacturers. VGI is struggling to grow sales for its XT7 Phenom Controller, an established product that has traditionally been a stalwart for the company but that has recently lost steam.
If we were to ask the Very Good senior leadership team to define how the Phenom provides value to its customers, they would answer with factors like the following: product performs every time; low price; service problems fixed immediately.
Let’s assume the customer segment includes manufacturing leaders like Jim at customer firm Next Step Corp.
Figure 1 shows two circles that capture value in the market. The circle on the right represents the set of customer Jim’s needs. The circle on the left captures Jim’s perception of VGI’s offering. Let’s say that the VGI leadership team assumes that Jim is satisfied with the Phenom on the three factors above. As such, those factors – r...