Differentiate or Die!

If you do not differentiate your business from your competitors, you are just another commodity! Being a commodity means that your products are no better than anyone else’s. This drives down your prices, erases profits, and eventually kills your business.

I wrote about what causes commoditization and how to avoid it in a post called Why Does Your Business Exist and Why Should We Care.

In this post Apple entered the MP3 market as a late comer. They were not the “first mover” and the market space already had a large number of competitors who competed on price. The market space was already commoditized.

Apple knew this but they understood that they could still dominate the space by clearly differentiating themselves from their competitors. They identified their key differentiators, measured themselves against their competitors, and realized that they were head and shoulders above the others. They entered the market and still dominate it today!

How to Differentiate Your Business With a Strategy Canvas

So, how do you identify and measure what differentiates you in your market?

This is where a tool like the Strategy Canvas comes in.

The Strategy Canvas is a simple but effective tool that I have seen in various forms over the years. Essentially, it is an easy way to rate the performance of your business against competitors that you may be up against. Follow the steps below to create one for your business.

Step 1

Determine what differentiates your business in the marketplace. Why do your customers buy from you rather than from a competitor? It is almost always more than one factor and the list of all possible differentiating factors are probably infinite. I have listed a few differentiators below as examples:

  • Price
  • Quality
  • Skill level of workers
  • Manufacturing techniques
  • Reliability
  • Financial stability
  • Geographical location
  • Manufacturing material
  • Logistic capability

Step 2

Rate your business and your competitors on a Low to High scale for each of the differentiating factors that you selected. Plot these on a graph like the one pictured below. The rating process itself can be handled a few ways:

  1. Marginal Accuracy – your honest gut feel of where your business rates against the competition. This should be based on industry feedback, publications, etc. Often business leaders already know where the business is good and where it needs to improve and they can rate it fairly accurately. The downside to this approach is that a leader also has blind spots and may miss something obvious in their ratings.
  2. Medium Accuracy – select a diverse group of people inside your business to do the ratings. Similar to the above approach, it will be based on an individual’s gut feel and their exposure to industry feedback and industry related publications. Using a diverse group of people helps to level out biases and broadens the exposure to the marketplace. It also removes some of the blind spot risks and promotes honest dialog.
  3. Better Accuracy – select an independent consultant to do a market analysis and provide the scores for you. This approach costs more but usually results in a more accurate assessment. However, it still won’t be perfect because an analysis like this is always quite subjective.


strategy canvas

Step 3

Analyze your results and use them as inputs to your strategy and goals. Choose the areas where you have strengths and make sure your strategy builds on these. Look at areas where you are weak and determine if this is something that you want to strengthen. If so, your strategy and goals should reflect that.

Take Action and Differentiate Your Business

Spend some time over the next month and draw a Strategy Canvas for your business. Decide what differentiates you in the marketplace. Determine where you need to direct extra attention and resources to create or strengthen your differentiation.

Download the Strategy Canvas template by going to the “Business Tools” tab and paging down to the “Operations Engine” downloads.

Also check out the following related and relevant posts:

Share your experiences with differentiators and commoditization in the comments below.


To put comparative thinking about excellence into action requires that we have a clear standard or envisioned goal, an accurate state of relevant self-knowledge, a strategy for improvement, and a scale of measurement.” Tom Morris


Download a free copy of my new Ebook: 12 Steps to Business Transformation. If you would like a business assessment to help kick off your business transformation, contact me at info@thinkingbusinessblog.com or at 587-227-5179.

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