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Staying Ahead of the Competition Is Job Number One in Business The world of business has always had a dog-eat-eat-dog aspect to it. Newcomers rise to the top by doing or selling something better, cheaper or faster than the reigning champ. The marketplace rewards a competitive edge, and the most successful entrepreneurs have an instinctive grasp of that reality. "We must scrunch or be scrunched," was Charles Dickens' colorful description of the central role competition plays, not just in business, but in most human endeavors. "You must conquer and rule or lose and serve, triumph or suffer, be the hammer or the anvil," was the more ominous perspective offered by Goethe. Ultimately, competition is a good thing, because it is end-users-be they individuals or other businesses-of all the products and services offered by businesses large and small that benefit most. Competition drives innovation and keeps prices in check. Competition may have its evils, as the philosopher John Stuart Mill observed, but it prevents greater evils. "Competition may not be the best conceivable stimulus, but it is at present a necessary one, and no one can foresee the time when it will not be indispensable to progress." Those words are as true today as when Mill wrote them, a century-and-a-half ago. A good way to get a handle on your own competitive edge is to take a look at what some other successful business owners are doing in this area. Following are examples of how three real companies define their competitive edge, continuously hone it, and wield it to keep themselves consistently at the top of their respective industries. Their names and locations have been blinded at their request, in the interests of protecting their own competitive edge.
BATTLING THE BIG-BOXES Joannie O'Neill probably could not have picked a more inauspicious time to launch her company, which came into being in 1987 as Downtown Office Supply. While she had industry knowledge cultivated during a career as an office supplies sales rep, O'Neill acknowledges she did not have much of a business plan. Worse, she opened her doors just as retailing's "category killer" phenomenon was targeting her core merchandise mix.O'Neill knew she couldn't compete on price against chains such as Staples and Office Max when it came to selling copy paper and file folders. She had to come up with a different persona for the venture she?d started with her daughter, Carrie O'Neill-one that would be unique enough that it couldn't be easily duplicated and profitable enough to make the business a going concern. The essence of O'Neill's competitive edge is reflected in the company's current name. Downtown Office Supply became Downtown Stationery and Gifts because the latter incarnation gave her a platform to target a unique customer base with a unique mix of products and services. Today, stationery accounts for about 75% of the company's business, and the store has carved out profitable niches in categories such as planners, calendars, frames and giftware by focusing on items that shoppers can?t find anywhere else. "We try to fill the voids left by other retailers with products such as desk accessories, bookends and other things that are not easy to find," she says. "There is a shop down the street that sells only lamps and lampshades. Where do you go when you want to get a lamp and you want to pick from a really good selection? That was the philosophy I adopted. I listened for what people said they couldn't find in other places, and I developed my shop into a place where they could find those things." O'Neill is well aware that some of the categories she offers, such as planners and desk accessories, are also available in big box stores, but she blunts that potential impact by carrying mostly higher-end items. "Most retailers just cherry-pick the best-selling items, but by carrying a well-rounded selection of price ranges and styles, we can offer our customers the kind of breadth and depth in these categories that other retailers don?t give to it," she explains. Most of Downtown's planners and photo albums, for example, are leather-bound and rarely found in a superstore. Downtown has become a destination outlet for stationery purchases and continues to provide engraved stationery to customers who have moved to locations as far-flung as New York, England, France and Mexico. It does a tremendous business in wedding invitations and carries hundreds of handmade greeting cards. "We sell through most of them," O'Neill reports. "They are targeted for what I hear people saying they want. I have always listened to the customers, and I still spend about 80% of my time working the floor." Listening to her customers- "but not just listening without thinking"-is the most important factor behind Downtown's competitive edge in the marketplace, O'Neill says. She leverages it into her relationship with suppliers by sharing information on emerging trends she spots that they might not know about. The payoff for Downtown is that it is often at the top of the list when exclusive suppliers introduce new items and lines-an invaluable edge for a business whose success is so closely tied to its reputation for uniqueness. To keep her edge sharp and to stay abreast of the latest fashion, style and color trends in the product categories Downtown carries, O'Neill travels extensively. She does about eight buying trips a year, building her schedule around the same core of key industry events and adding two to four new ones in different regions each year. She also attends seminars, participates in roundtables and scouts other retail outlets looking for creative inspiration. Downtown's competitive edge has remained sharp for almost 20 years. The original 1,000-square-foot store has quadrupled in size through two major expansions, and O'Neill's strategy of focusing on customer feedback to identify underserved niches has paid off.
BRINGING BACK REAL SERVICE In today's peripatetic society where consumers with a drive-thru mentality are courted by hordes of specialized service providers focusing on increasingly narrow niches, how do you position a generalist business for success?For ABC Auto Care, located at the juncture of two well-established neighborhoods for more than a quarter-century, its competitive edge is capsulized in its tag line: "Yesterday's service, today's technology." "There was a time when you could go to a place called a 'service station' and get all your car care needs met," says Marty Foley, founder and president of ABC Auto Care. "Today folks go to a quick-lube place to get their oil changed, a tire place or warehouse club when they need tires and a car dealership when they need any kind of more complicated repair. In a family where mom drives a BMW, dad drives a Suburban and the kids might drive a couple of different Asian imports, that's a lot of driving around and inconvenience." Foley has crafted a management philosophy for ABC that acknowledges the location-specific aspect of his business while maximizing its appeal to the greatest number of potential customers. Its location means that ABC draws from a diverse mix of demographics-affluent consumers, middle-class households, blue collar workers and students. Foley's formula for targeting that diverse customer base and differentiating ABC from the legions of other auto service providers in the marketplace is simple but uniquely effective. "We look at serving the individual rather than a group or a market niche," he explains. "We ask what we can do to make your car service experience the best possible. We look to your driving style, needs, expectations and budget. What are the things that will help support your life in the transportation area?" he asks. "We work to deliver the service the customer wants, not the service ABC wants them to have?that is the theme of how we deal with our clients." The second half of the formula is a focus on technology. "We back up our fundamental commitment that we are going to take care of the individual's service needs by investing in the best equipment, technology and training available," Foley says. ABC Auto Care's workforce of about a dozen full- and part-time employees includes a senior staff of highly trained, certified technicians. The most junior technician has a decade of industry experience, the most senior more than 30 years. Foley puts his money where his mouth is to guarantee he can deliver on the promises he makes. Keeping the competitive edge sharp at ABC requires the expenditure of thousands of dollars on high-tech equipment and training every year to keep pace with rapid changes in automotive technology, but Foley says it's worth it. In addition, he keeps a close eye on the company's customer satisfaction index to make sure clients believe they are getting what they?ve been promised. "We use an online customer satisfaction survey. Any client who gives us an email address can fill it out and it comes back directly to me," Foley says. "We have an extremely high customer satisfaction index, about 96%. When something falls below that mark, I talk to those clients to find out why. Almost always the problem turns out to be not with the quality of the work that was done, but in the communication and understanding of the process." ABC includes a 3-year/36,000 mile warranty on virtually all its repair work, an extended warranty unheard of in the automotive service industry. Rather than view quick-lube shops and other niche service providers as the competition, Foley forms alliances with them so they refer customers to ABC for work the specialty shops can't provide. Taken together, the elements of Foley's approach keep the competitive edge razor sharp at ABC.
FOUR-PART PLAN IS ROCK SOLID From the outset, Eddie Mancini, founder and president of Gibraltar Surfaces, Inc., made it clear his company was going to march to the beat of a different drummer in establishing an identity that would differentiate it from traditional fabricators of solid surfaces and stone countertops. The strategy he developed to create that competitive edge is built on four commitments:
"Our concept appears to have been well received, as we have experienced 30% average annual growth since we started in 1995," Mancini says. "It is our intention never to fall into or be limited by any particular market niche. We work with custom builders, remodeling firms and general contractors on projects ranging in size from individual kitchens to full hospitals." While the company's flexibility, reliability and capabilities to work on a wide array of project types are important, the greatest competitive edge Gibraltar Surfaces enjoys is its employees, says Mancini, who describes himself as the company's "benevolent dictator." "They have all been through our own apprentice program as well as annual manufacturers' training schools," he explains. Mancini says every employee at Gibraltar Surfaces has the same job description: "Whatever it takes to complete a job safely, correctly and on time." Central to Gibraltar Surfaces' efforts to maintain its competitive edge is its designation as a Certified or Master Fabricator by the manufacturers of all the products it offers. Maintaining those certifications entails ongoing training in new technology and investment in new types of equipment, Mancini acknowledges, but it results in customer assurance that all product requirements are met. Most of the products the company sells come with a 10-year installed warranty, and Gibraltar Surfaces augments that with a policy of handling any labor-related problem no matter when the product was installed. "Forty percent of our business comes from repeat customers and referrals, so it's easy to see why we strive to have only satisfied customers," Mancini says. "We believe this is how a company should operate to be deserving of staying in business. We do not base our business on how our competitors run their businesses." And that's a competitive edge that's working just fine for Gibraltar Surfaces.
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