Market Position: Company Strengths and Unique Market Position
Why do some people eat at the same restaurant time after time, visit the same salon, or are adamant about using the same dry cleaners, despite the fact that there are thousands of other available options? These companies have established a unique market position that provides for loyal and repeat customers, a position that is incorporated in to the company’s overall strategic plan that will result in revenue growth and company sustainability. This paper addresses three key strengths of small businesses: 1. Intimate Customer Service, 2. Flexibility to Adapt to Environment, and 3. Industry Expertise.
At the Giersch Group, we believe that it is vital focus on strategic thinking and understanding the company’s current market position in preparation for the next year. While most companies use this time for holidays, vacations or preparing for the fall push, we encourage you to lay the foundation to develop long-term strategic planning that will, in turn, provide the appropriate materials necessary to create next year’s budget and maximize year-end operations.
Understanding the market position of your company can be achieved through utilization of a SWOT analysis. In the past, we focused on Your Threats Relative to Your Competition, demonstrated by the SWOT analysis. In this resource, we look to the strengths of your company and how these attributes contribute to success. We also examine the common strengths small businesses have when understanding its unique market position.
SWOT Analysis
As a business considers their strategy, they will evaluate the chances of achievability. A SWOT analysis helps in this evaluation. 
Using external and internal factors, the SWOT identifies the strengths, weaknesses, opportunities, and threats that relate to the success for the strategy.
The chart to the right shows the typical format of a SWOT analysis. Strengths and weaknesses are considered of internal origin, or attributes of the organization, while opportunities and threats are considered of external origin, or attributes of the environment.
Creating this SWOT analysis for your business will allow you to assess how your company is performing and what areas need attention. It is good to review this on an annual basis for any changes that took place in the past year. The company’s strategic plan should incorporate the SWOT analysis to develop the company’s strategy for the coming year.
Company Strengths and Its Unique Market Position
In order to compare the strengths of your business, please first conduct a brief competitive analysis as outlined in our previous paper on Market Positioning. It is important to note that although strengths are developed in relation to competitors, they should not be confused with essentials needed to survive in the market. For example, if all of your competitors provide excellent customer service, then excellent customer service is not company strength in the market. It is a necessity. In addition, it is important to remember that strengths are internal attributes of the enterprise only and meet the following characteristics:
- Can be easily identified by customers.
- Are tangible (can be precisely identified, measured, or realized by customers) or intangible (cannot be physically touched or measured) internal processes you perform, not the products you make.
- Create value in the marketplace.
The end result of your competitive analysis should make clear the core capabilities of your business and define your unique market position. This market position must be clear and concise, explaining what your competition either cannot, or does not, offer. In addition, it must be strong enough to entice new customers to switch from your competitors to your company.
As we work with small businesses, we see several strengths that lead to success. Our experience shows that emphasizing such strengths allows small businesses to win over customers, particularly relative to larger companies that may consume the broader market. These strengths include 1. Intimate Customer Service, 2. Flexibility to Adapt to Environment, and 3. Industry Expertise.
1. Intimate Customer Service
Intimate customer service in large-scale companies is more challenging to achieve where overhead costs of adding personnel can be restrictive. This provides a significant opportunity to entrepreneurs and small businesses. Creating a direct and close relationship with clients, small businesses are able to understand their wants, needs, and preferences. As a result, they can provide them with a better, more personalized experience that leaves the customer feeling valued and important, thus developing more loyal customers.
One example of intimate client service is the ability to work out a payment plan for a customer working through financial stress, rather than send them directly to collections. In a professional service firm, client birthdays or company milestones may be remembered to provide a sense of personal care for the individual that moves beyond the typical company/client relationship.
Intimate customer service, however, is not a natural attribute to every small business. It is something that must be developed and implemented within the company culture. Some ways to achieve this is to ensure that staff that interface with customers are motivated to provide the personalized service. This includes adequate product knowledge for the direct marketing and sales strategy to work. While this also may require small businesses to provide staff with additional training, the return on the investment will assist in creating a competitive advantage over competition and thus, growing its revenue.
2. Flexibility to Adapt to Environment
When it comes to adapting to change, small businesses often have an advantage compared to their larger counterparts because they can move more quickly to take advantage of a new opportunity. In fact, history has shown that the most successful companies, regardless of their size, have flexibility at the core of their business model. By understanding the market, enhancing or changing their current business model, and taking advantage of new technologies, these companies have been able to continue to grow their profitability and increase their market share. Understanding this, the more flexible and quicker the small business can be, the more a competitive advantage can be created over other small businesses in the market.
Like intimate customer service, a flexible business model is achievable but not easily done. Cost cutting alone will not bring flexibility. In fact, complacency is the easiest way to fall into the inflexibility trap. A flexible business model must be driven through strong leadership that will be constantly responsive by anticipating, evaluating, and responding to customer needs and shifts in the industry. In addition, these needs must be translated into innovative products or services the customer will desire. By having common, lean processes and operations to generate products and services that produce growth, the small business can address quality issues before they become major issues.
For example, an electrical and security company found themselves with decreasing revenues due to the decrease of new homes being built in the marketplace. The ability to transition quickly allowed the partners to implement a plan to sell and install solar as an additional revenue stream. This change ensured that they survived the housing crisis and kept most of their staff.
3. Industry Expertise
Industry expertise is a significant customer advantage that small businesses can utilize to establish its market position and become industry experts, particularly compared to other large businesses. Clients frequent small businesses to receive both the service and the expertise. For example, a customer could decide to go to Wal-Mart to purchase tools to build a shed. If the customer is lucky, they might locate a sales associate who understands a bit about the products and could provide some assistance for a minute. At the small hardware store, however, the customer is most likely to encounter the owner of the store and/or an employee that has an interest and understanding of the hardware industry. The employee will also most likely have experience as to what specific tools that work best, what wood to purchase, and have time to walk the customer through the steps on how to build the shed.
As a final examination of company strengths, ask your customers what they believe is your unique market position. It may be possible that a printing company believes its strength is quality of the product but the customer values its timeliness of product turnout. Thus, the company spends more time focusing on quality thereby decreasing the value perceived by customers.
Articles for Further Reading
- “Write a Business Plan.” Small Business Administration.
- Berry, Tim. “Use SWOT to kick start your planning.” 23 July 2007.
- “Understanding Your Target Market and The Competition.”
- Walters, Jaime. “How To Uncover Employee Potential.
For more information, please contact the Giersch Group online to request a free consultation. We have offices in Milwaukee, Madison and Brookfield Wisconsin.
