How do you acquire competitive advantage in hostile environments?

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IMG-20141225-00131What is a hostile environment? It’s not where competitive intensity is high. That is capitalism. It’s where for whatever reason business and owners are penalised, punished and prevented from market opportunities. We could elaborate but there are many ways in which businesses are being harmed and harassed.

We want to look at how to reposition, transformed or reimagine your small business to strengthen your medium-to-long-term competitive position. Here we can’t be too specific because each business is different. Customised advice is best suited to a private consultation. All I’m trying to do here is get you to think about possibilities before the carpet is pulled out from under you.

Some use terms such as “strategic agility” or “innovation” to describe ways to cope and survive in hostile environments. The basic underlying issue is that small businesses need to adapt to change despite uncertainty. They need to monitor the environment, seek alternative ways of doing business and find strategic gaps where the chances of survival will be enhanced. A fish swimming through the people.

One way is to move up the value chain. What this means is to become a supplier of goods or services that take your small business out of the crowded spaces where barriers to entry are low and where the power of buyers is strong. For example, in B2B markets large customers will attempt to commoditise your products or services to drive down prices to unsustainable levels. Their mandate is to seek the lowest bidder without regard to long-term supplier sustainability. It’s a win-lose game where the behemoth tasked with a spurious agenda, ends up destroying value through self-interest at all cost.

The other approach is to develop and nurture critical skills that are difficult to nurture and acquire. This is not an overnight strategy. It’s one that takes time to establish and grow. I don’t want to be specific here. I leave it to your own experience and imagination to decide for yourself what skills are critical and which ones to avoid – those that can be easily replaced by technology or duplicated by cram training colleges and number crunching universities flooding the market with an oversupply of graduates.

But the key is really to position yourself to be a supplier of vital parts that are not easily made by the giant corporations or where they can’t realise economies of scale. It’s where their entry would not be economically viable. Where they can’t match quality, attention to detail and the complexity of extensive customisation.

If you think this sounds like theory do yourself a favour and find examples for yourself of small agile businesses operating behind the scenes in exclusive markets – both B2B and B2C – where skill and high quality is placed at a premium. These are not the business is covered in the “innovation” section of business rags with PR-inspired stories or radio business gurus dishing out awards in the narrow confines of their subjective and fawning likes and dislikes.

If you’re someone who is deeply worried about how to find and realise competitive advantage outside of manipulated markets, here’s the deal: Go here and get yourself a copy of “Breakthrough Ideas”. It costs far less than a private consultation. If you’ve read this far, you’ve qualified yourself as someone who knows they’ve got to do something about the future. Don’t procrastinate any longer. Do something.

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