Strategic planning to get a competitive advantage

The answer – create a strategic plan. For most businesses, this can be a challenge – we often see decisions are followed that are under their noses. As all businesses are the sum of such decisions, if a business selects decisions poorly in the first place it can cripple its long-term potential.

Goals need to be carefully chosen and well-communicated to succeed. The choice of how to implement them also works best with the full range of options on the table; making the best, rather than the immediately obvious, choice. Ultimately, it is hard to accomplish anything without having a well-defined plan. This can seem like an overwhelming challenge, but breaking it down makes it much simpler.

Strategy is fundamentally about the market first, and your ability to meet its demands second. If you have not realised this then you are in danger of creating your strategy inside out.

Gaining a sustainable competitive advantage

As a starting point, you need to think about your sustainable competitive advantage (SCA). Your SCA is an advantage that a business, product or service has relative to a competing organisation, product or service.

To be really effective, the advantage must be:

• sustainable;

• hard to copy;

• unique;

• superior to the competition; and

• applicable to multiple situations.

Determining the SCA for any organisation requires an understanding of the customers’ needs and preferences. A competitive advantage arises out of activities that provide high value to the customer and a strong ability to beat the competition. The first step is to think about the external market factors, and then how you are going to meet them.

• The external factor – what are the key success factors that will be considered of high value to your clients?

• The internal factor – what is the likely impact on the practice if this issue was fixed?

Factors that are both high on value to clients and impact positively on the organisation are most likely to be the SCA for the practice.

Once you have identified the SCA, you must then think about how you will deliver this to the market. This will require planning around a range of other factors, which will include marketing, operations, innovation, human resources and finance.

The SCA provides a focus for the practice. For example, if you decided your SCA was the lowest price, it will have a distinct influence on marketing, operations, innovation, human resources and finance.

Imagine if your SCA was best quality. This will have a completely different impact on how you decide to market the practice, how you will operate, what innovative products and services you will offer and your human resource function.

Most practices do not have a clear SCA and, as a result, try to be all things to all people. You can’t win in the market by having the lowest price, the best quality, the best people and the fastest response time. Attempting this will simply mean you will end up as being “average”, as you will be, in essence, aiming to do what every other practice is doing, which is being good at everything.