In order to determine and build your best competitive strengths, assess these factors below in terms of what you see as your company's competitive advantage, i.e., why buyers are buying from you and not your competition.

How much do customers buy from you due to these "C1" factors?

• The quality and price of your products and services?
• The talent/expertise of your people?
• The knowledge/technology that you provide?
• The location/proximity that you offer?
• The trade experience you have?

How much do customers buy from you due to these "C2" Factors?

• The trust you build in your buyer/customer relationships?
• The business ethics/standards you hold?
• The industry reputation you have?
• The stability/reliability you can offer?
• The consistency you provide?

How much do customers buy from you due to these "C3" Factors?

• The effortless/effective/seamless delivery process you provide?
• The integration of competencies you offer?
• The collective intelligence you can apply?
• The organizational alignment/coordination you can provide them?
• The invisible force of desire that you magically create?

Which set of these factors (C1, C2 or C3) do you most want to be known for by your customers? If you are not sure how your customers see you now, then use the above questionnaire to ask their opinion of you.

Based on the above factors,

• If you are mostly competing on: "C1" Factors, then you are competing on: Competency/Capacity
• If you are mostly competing on: "C2" Factors, then you are competing on: Credibility
• If you are mostly competing on: "C3" Factors, then you are competing on: Capability

If your company is just competing on building and improving your Competency/Capacity, then you may be viewed by your customers as just a Commodity Vendor who can be easily replaced. Competencies/Capacities can always be, in time, matched by your competitors. Your company may have important talent, experience or expertise, yet those can always be duplicated or bought over time. Thus, you can become easily "commoditized" by buyers who choose vendors based on price alone.

If your company is competing on Credibility (in addition to Competency) then you are building strong human bonds between yourself and your customers, and will be viewed as a Trusted Supplier. However, your customers may not remain fully tied to you, replacing your company if a competitor offering greater value comes along.

If your company is competing on Capability (as well as Credibility and Competency) then you provide a business-to-business "experience" and value that cannot be matched. You will then be viewed as a Business Partner, with a dynamic interdependency (business ties that bind) between you and your customers which link you closely together.

Thus:

• Those seen as a: Commodity Vendor Compete on their: Competency Are vulnerable to: Commoditization
• Those seen as a: Trusted Supplier Compete on their: Credibility & Competency Are vulnerable to: Higher Value & More Interdependent Offerings
• Those seen as a: Business Partner Compete on their: Capability, Credibility & Competency Are vulnerable to: Nothing!

So, going back to the list of factors, which ones do you want most to compete on and build into your organization?

*adapted from Tom Wentz, Transformational Change: How to Transform Mass Production Thinking to Meet the Challenge of Mass Customization, Corporate Performance Systems, Inc. 1999. Original seminal source is Competing on Capabilities: The New Rules of Corporate Strategy, by George, Jr. Stalk, Philip Evans, Lawrence E. Shulman, Harvard Business Review, March 1992


Harvy Simkovits, CMC, President of Business Wisdom, works with owner managed companies to help them grow, prosper and continue on by offering innovative approaches to business development, company management, organization leadership and learning, and management education. He can be reached at 781-862-3983 or .