Thursday, March 23, 2006

Positioning Series: Distinctive Competence

What is the company's distinctive competence?
This question is the first of several questions I've enumerated that a product manager should answer to most effectively position a product.

As it faces competition, your product will usually fail in the marketplace unless your company has some sort of sustainable advantage. The company's distinctive competence is the source of this sustainable advantage.

Examples of distinctive competence include:
  • Market leader or first to market. Being the market leader or first to market sometimes means that competitors will have difficulty ever catching up.
  • Unmatched staff. If you have an extremely talented or skilled staff that no other competitor can hope to acquire, you may be able to leverage it for sustained advantage.
  • Location. Your company may have an ideal location that no competitor has. That location may give you a low tax rate or some other financial advantage. For a brick-and-mortar business, it may mean visibility from the street or convenience for your customers.
  • Intellectual property. Technologies and other IP that your product owns may prevent competitors from being able to duplicate your success.
The position of your product should be compatible with - and, ideally, leverage - the company's distinctive competence. If not, competitors are bound to undermine or destroy it.

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