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The understanding of
Strategy revolves around knowing three key components:
- Yourself and your organization;
- The terrain (the healthcare environment and the Critical Success Factors (CSFs) of your
key influencers; and
- Your competition.
An article "The Origin of Strategy" by Bruce D. Henderson
(Harvard Business Review), supports the process of identifying that one strength on
which to rely for competitive advantage.
Mr. Henderson states, "Competitors that make their living in the
same way cannot coexist, no more in business than in nature. Each must be different enough
to have a unique advantage. The continued existence of a number of competitors is proof
per se that their advantages over each other are mutually exclusive."
If you consider such organizations as Sears, Kmart, Wal-Mart, and Radio
Shack, you see this competition played out. Each continues to survive, and in some cases
to grow significantly, regardless of the competition. Some are not only surviving but
thriving. They have done so by differentiating themselves. They have staked out a position
that they feel gives them a competitive advantage in the eyes of the customer.
Strategy is a search for a plan of action, which will give you, your
company and your product a competitive advantage. This begins by first looking at where
you are and what you have at this point in time. The competitor who is most like you is
your most dangerous competitor. The differences you uncover between you and that
competitor are the basis of your competitive advantage.
Whatever your company or product strength, you
must find a position in the product or business arena where you can best defend yourself
and your product against the competition. And to be aware of all the facts, you need to be
aware of all potential competitors. Those might include customers, suppliers, potential
new product entrants, and substitute products.
One example of a competitor in the hospital
market is the Group Purchasing Organization. According to Michael Porter
("Competitive Advantage," Harvard Business Review), a buying group is powerful
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- it purchases in large volumes;
- the products it purchases from competing companies are generic or undifferentiated;
- the product it purchases forms a component of its product;
- your product is unimportant to the overall quality of their product offering;
- your product does not save money in terms of cost of production or utilization of
resources; and/or
- the vertical organization has the capability of delivering its own version of the
product.
In brief, most people who buy a
product are pricing sensitive when they are purchasing products that are undifferentiated.
The effective strategist is the one who considers all of these aspects when he or she
develops the plan of attack.
So, a key to growth (or even survival) of your
product in the complex institutional account is to take a position that is less
vulnerable to attack from your competition--your competitive advantage.
To strengthen your position once you have won the competitive battle:
solidify relationships with key influencers; continue to differentiate your product in
your customer's eyes; look for additional indications/uses or functional areas who benefit
from your product. Link your product to operational Critical Success Factors such as
quality, efficiency, cost of finished product, , or state-of-the-art technology; and
establish yourself and your company as the innovational leaders.
Two quotes from your Building Competitive ImmunityÔ Workshop highlight these issues and both
are from a great and practical writer on the subject of competitive positioning and
strategy, George S. Day:
"The essence of strategy is a positioning statement that sets
your organization and your product apart from the competition in ways that are of
importance to the customer."
"What is needed from a strategy is a statement of direction that
serves as a central theme guiding and coordinating the entire team. We are seeking a
compass, not a detailed road map." |
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