This should position your company to achieve sustainable profitability through value creation. Of course, breaking down a complex topic into a single sentence is challenging enough. Translating that into a winning strategy is something entirely different.
Steps:
According to UCLA Anderson School of Management Professor Richard P. Rumelt in his book Good Strategy, Bad Strategy, three vital steps need to be considered to overcome the aforementioned challenge:
- A diagnosis of the challenge
- A guiding policy to overcome the obstacles which have been defined in the diagnosis
- A set of coherent actions to carry out the guiding policy
Diagnosis of the Challenge
The first step of diagnosing the challenge is looking internally, specifically at customer pain points and how your business solves them. Using the maturity model can be very effective to measure how well your company is doing. Do you do something that solves a problem for your current or potential customers?
This is the foundation your business will be built on, and to be successful you need to solve a problem better than everyone else. Your competitive advantage should link to your vision and this vision should directly link with your competitive advantage. There are a few basic questions you must ask yourself first:
- What pain point does my product/service address?
- Does my business have the lowest costs?
- Does my business offer some sort of differentiation?
- Does my business offer a mix of both?
Can you outline your distinctive strengths or unique selling proposition? How do your assets, knowledge, or organizational structure create superiority over others? Well, there are a few questions to ask to dig a little deeper.
Think of Growth Hackers as a doctor for your business: diagnosing core challenges and prescribing strategies that strengthen your competitive edge. Does my business offer:
- superior efficiency?
- superior quality and customer responsiveness?
- superior innovation?
Superior efficiency
Defined as outputs/inputs, efficiency boils down to having fewer inputs to produce some sort of output. This can be in terms of labour, capital, or other resources. If one company can spend $1 to make a hamburger and another company must spend $2 for the same quality, the former is clearly showing more efficiency.
We saw this for example with Ford’s Model T which become the first affordable car in the early 1900s. Ford standardized the automobile to make it faster and cheaper, which were the most important attributes to their target market. Of course, there are many ways to achieve better efficiency:
- economies of scale
- lower fixed costs
- learning effects (creating efficiency by learning how to do something better)
- lowering the experience curve (having more experience and thus creating value more efficiently)
- automation
- supply chain management
Lowering your costs in terms of products and labour is only part of the equation. Marketing also plays an important role in your company’s efficiency. Acquiring customers is expensive. You can lower your acquisition costs by taking care of the customers you already have. Lowering your defection rate and increasing your brand loyalty is just as, if not more important, as anything else.
Not only do more sales come from your loyal customers, but these customers are an important part of your brand. Make no mistake, no ad can deliver a message as strong as one delivered by a friend, colleague, or trusted advisor. So how do you create a stronger bond with these customers and transform them into brand ambassadors? Superior quality and customer responsiveness.
One of our manufacturing clients was overspending on customer acquisition until Growth Hackers implemented efficiency-driven strategies, lowering costs while increasing engagement and revenue.
Superior quality and customer responsiveness
- form and features
- performance
- durability and reliability
- style
- What is it they need?
- Lowest possible price?
- The most innovative product available?
- Customization?
- Short response time?
- Quality customer service?
This list just scrapes the surface of what you’ll need to think about as every industry will have specific needs. You’ll also need to narrow down the deeper individual needs of your customers.
- Why do they demand the lowest price?
- Why do they want the most innovative product?
- Why do they need customization?
Once you’ve figured out why they want something, you’ll feel that you know them better and can narrow your focus on how you can be more competitive. Why, for example, do new parents buy disposable diapers? To allow the baby to sleep and feel comfortable longer, which creates less stress for the baby and the parents.
The fundamental idea is that parents have an easier life with them as opposed to other options. If your customers demand a more sustainable option, however, disposable is probably a negative attribute. Clarifying the why of your customer will give you a better idea of their deeper desires and what drives their purchases. If you haven’t gotten there yet, keep asking why until there is nowhere to go!
Now you can change directions and figure out how to connect with current and potential clients. Are they likely to comment on an Instagram post or answer a survey? Do they take the advice of brand influencers or like to watch television commercials?
Getting their attention is hard. There are thousands of marketing companies, influencers, and advertising agencies that specialize directly in selling products to the world. You’ll have to dig deep to gain the best possible advantage over your competitors, and now that you know your customers better, you’ll be a step ahead.
Before partnering with Growth Hackers, many of our clients offered products without consistently meeting customer expectations; after implementing our quality and responsiveness strategies, every interaction reinforces trust, satisfaction, and long-term loyalty.
Superior innovation
Being the most innovative company around isn’t always possible and isn’t always needed. Many companies take ideas from others after the expensive R&D process is over.
If your company, however, is defined by your innovations, it can be the most important aspect of your strategy. You’ll have to think about how to innovate existing products or create new ones while limiting failure as much as possible.
To give yourself the best possible chance of success, there are some questions you can ask yourself before diving in too deep:
- What are my customer’s needs (remember to dig deep and keep asking why?)
- Can this design be manufactured efficiently?
- Can I design a way to keep costs under control?
- What would be considered a timely manner for development?
- How can I integrate my R&D, manufacturing, marketing, and other aspects of my business?
Growth Hackers has guided B2C and B2B clients to innovate strategically, transforming ideas into market-ready solutions that satisfy customer needs and drive measurable growth.
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A Guiding Policy to Overcome The Obstacles Which Have Been Defined in The Diagnosis
Overall competitive theme
Market segmentation
- Standardized
- Products/services developed for certain segments
- Focused
A Set of Coherent Actions to Carry Out The Guiding Policy
- Create a list of unrealistic or general goals
- Focus too short term or too long term
- Use any set of numbers to build a strategy
If you believe you can create an advantage in another area, you may need to make an investment. For example, you can focus on employee training in a particular area or hire externally. What’s important is that you need to be able to demonstrate to your customers that you can do something better or cheaper than everyone else. Even more importantly, you and all your employees need to believe it.
So what is it that you do better than everyone else?
- Low cost?
- Differentiation?
If it’s low cost, it’s a little more straightforward. They could add automation, hire students as interns, have employees work from home, take advantage of online meetings, or develop software that may have a high fixed cost but will save money over time. Growth Hackers has guided early-stage startups, SMBs and enterprise companies to translate competitive insights into actionable strategies, ensuring every goal is backed by clear steps and measurable outcomes.
If it’s differentiation, then let’s think about how to deliver more value to the customer. Maybe opening an office internationally with local staff will allow your company to gain insight into local customers. Perhaps hiring or training employees for specific skills will create more value. Maybe it’s using more case managers to work with important clients or more flexible teams. It will depend on the problem you’re trying to solve and your industry but the important thing is to do it better than anyone else.
Once you’ve created these actions, pitch them to your staff or other advisors. They may have on-the-ground insights. Some of the best suggestions will come from people who interact with your customers daily. More importantly, let them speak first and listen with an open mind. They will have ideas that can and will help.
If you go first, they may be reluctant to speak their minds. It’s not to say that you must use every suggestion and you may even have push back, but allowing others to be a part of your strategy will create a sense of importance throughout the company. Everyone has to be on board with the message developed at the top and this set of actions must be clear throughout the organization.
Case study: McDonald’s
Here is an example from McDonald’s’ corporate website. “Our mission is to make delicious feel-good moments easy for everyone.” McDonald’s has assumed that by pulling on the heartstrings of the public, they can combine feel-good jargon with a business idea. Including “delicious” gives you an idea of what the company is about but other than that, there isn’t much to go on.
This type of generic vision does not give employees, investors, or even customers an idea of what the business is trying to do. However, if you look at an annual report, you get a little closer to what this company is about. Here is a short segment: “By leveraging ‘the System’, McDonald’s can identify, implement and scale ideas that meet customers’ changing needs and preferences.”
The company can do this at a rock bottom cost. Basically, we are looking at an unbeatable supply chain and the lowest costs. It’s no wonder the company has been so successful and it’s also easy to see why McDonald’s can charge a few dollars for their products while smaller businesses must charge much more.
Still, we would almost like to see something along the lines of “Putting a McDonalds’ product on the plate of everyone around the globe once a week for the lowest possible cost.” Although incredibly ambitious, this kind of statement creates direction. It is something everyone in the company can strive towards and should be what the CEO is talking about in the boardroom.
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Case study: Microsoft
Back in the 1980s, Microsoft was still establishing itself as a software company. With a team of intelligent business people and engineers, the company had the vision to put “a computer on every desk and in every home.” Ambitious? Yes. Possible? Not too far off.
Microsoft in the 1990s seemed unbeatable. Through non-exclusive licensing and pushing for a market of third-party programs and accessories, Microsoft was able to create high switching costs for consumers who have already invested in compatible software and accessories.
Because of this, they were able to take advantage of the up-and-coming PC clone market. Furthermore, by bundling programs such as Word, Excel, and Internet Explorer with Windows, the company was becoming a one-stop-shop for anyone interested in using a computer.
Creating this software was and still is expensive. Software development (at that time) was more of a fixed cost, meaning that Microsoft could then sell their programs at scale with low variable costs for their products. For example, let’s say they develop software for $1 million.
The cost of the first product sold is approximately $1 million per unit. After the second is sold, the cost goes down to $500,000 per unit and so on. This means that, unlike other industries, there is no limit to how many can be sold and that after each unit is sold, costs go down. If Microsoft sold $1 million copies, the cost per unit is just $1.
This is a very basic example of how this strategy works and is not intended as an exact science by any stretch of the imagination. Google later used a similar strategy by basically giving away programs such as Chrome, Android, and other types of software to develop scale to mine information and sell advertising.
Building an Internal Strategy and Implementing it
It’s not easy to develop a strategy and it takes time. We didn’t even really touch on an external factor or an analysis of competitors, which are equally of importance.
But first, let’s nail down the internal factors and this is done by asking question after question. If you don’t ask enough questions, you’ll never really get to a point where you’ll be able to start building the foundation of your strategy.
Microsoft started with a vision of “a computer on every desk and in every home.” Ambitious? Yes. Achieved? Well, at one point…almost. But with this in mind, the company was able to build a strategy around achieving this target and everything they did was specifically aimed at getting there.
You may have ambitions just as big or something a bit smaller, but that doesn’t mean you don’t need to focus on your company’s strengths to build your strategy. This is just a starting point and now it’s time to dig in and find out what sets you apart from your competition. Start with “What do we do better than everyone else” and build from there.
Growth Hackers is one of the best growth hacking agencies out there. In this digital era, your digital marketing strategy is at the core of your internal strategy. With Growth Hackers, you will enhance your band awareness, get more leads, transform more leads into customers, and turn customers into advocate for your brand.
