Coming back from the Orlando Symposium 2018 show, I have learned that many companies confuse the terminology, competitive positioning, and competitive differentiation. At times, some of them may use these two terms interchangeably. However, there are strong distinctions between the two. Here are my thoughts:
- Competitive positioning is when you position your product/solution that has the best chance to beat the competition from an elevated attacking position (Art of War tactic). It could be a strong partner ecosystem, or a large sales field footprint that can outsell the competition, or a brand that everyone recognizes.
- Competitive differentiation is when your product/solution is unique and no one has anything “on the truck” that can compete against your offering at all.
Having both would be a major competitive advantage, however; having just one of these, is it really an advantage? Which one of these is worth more than the other? Having a product/service that is truly unique in the market place? Or, having a great competitive positioning that puts your company at a go-to-market advantage? Which one of these should you foster and proliferate first?
From my overall experience, both working at vendors and advising with clients, my inclination tells me that competitive positioning is one of the hardest but most gratifying competitive advantage you can build at your company. Engineering and product management a differentiated product/solution could be a panacea. However, if you do not have a strong competitive positioning of the product/solution, then your competition may eat your market away. I understand one may see this from the other side. If you do not have a differentiated product, then how can you best have a competitive positioning advantage. This is the $1B question indeed!
In the digital age, companies are innovating at the speeds we have not seen in decades. Some of these companies have strong product/solutions differentiation, but fail miserably. Why? Because they did not have a strong competitive positioning against the competition. Their competitors were well positioned even though their products/solutions were essentially “me-too”. So when you are at the cross-roads of investing into which competitive advantage you want to gain, consider positioning your product/solution at a point of strength. Then your product/solution differentiation will come due to what the customer demands.
There is no right or wrong answer here. But it is important to not confuse these two terminologies when it comes to your competitive advantages.
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