Is Strategic Differentiation Essential for Business Success?

I’ve been around the strategic planning game for quite a while now, and people keep telling me that strategic differentiation is essential for business success. The questions meant to uncover this differentiation are usually something like:

  1. Why should I buy from you instead of your competitors?
  2. What makes you different in a sea of sameness?
  3. How is your value proposition innovative?

Seems to me the answer to this question depends a lot on how you define “business success.” Apple is often cited as a strategically differentiated company that has disrupted their space (not as much recently as in the past, however), and I buy from them, but I also buy lots of things from businesses that aren’t particularly strategically differentiated.

For example, we’ve been using the same car mechanics for over twenty years because they do a good job at a fair price (at one time we had five cars and I was negotiating for a fleet rate). There is nothing particularly differentiated about them as compared to the other car mechanics in my area. In fact, they don’t even seem to have a growth strategy; they haven’t gotten significantly bigger or smaller in the time I’ve taken our cars there.

Does this mean that they aren’t a successful business? I suspect the owners and employees are all making a very good living as witnessed by their extremely low turnover rate; I’ve been seeing the same faces forever. This sounds like a pretty successful business to me.

So, how do you define business success? It seems that many business leaders want to be the next Apple, Facebook, etc.,  disrupt their market, and be the next “unicorn.” Hey, I’m a big fan of innovation, and there’s nothing wrong with that vision.

Keep in mind, however, that you can define business success in other ways as well (like my car mechanics seems to have done). “Disruptors” inevitably inspire “imitators,” and often the imitators are more profitable in the long run. I’m not at all discouraging big dreams and big visions, I’m just saying that dreams, visions, and success are what you define them to be.

Speaking of Apple, Steve Jobs famously said, “Don’t be trapped by dogma – which is living with the results of other people’s thinking.”  Perhaps this also applies to the dogma of differentiation…

High-Performance Habits

  1. Don’t live by someone else’s dogma; be clear on your vision of business (and life) success
  2. Build your business strategy around achieving your vision.
  3. A lot of business success is about execution; i.e., doing a good job for a fair price. So few businesses really do this well that it alone will differentiate you.
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