Business Finance
BCN 5771 Florida International Market Differentiations Strategies Essay

BCN 5771

Florida International University

BCN

Question Description

I’m working on a Marketing question and need guidance to help me study.

Directions

  • After reviewing the class material and the Differentiation Guide pdf please answer the following questions:
    • What is differentiation and why is it so important in today’s competitive market?
    • Why is important to test our differentiators?Name 3 of the most common challenges companies face when developing their differentiator.
    • In looking Chapter 2: 21 Ways of Looking at a Differentiator. Pick the top 2 that got your attention and explain why?
    • How does the Differentiation Analysis Framework benefits your differentiation strategy. Name a minimum of 3 reasons and why?
    • What companies can do in building a long-term sustainable differentiation strategy?

Questions must be answered in detail and must be answered from course pdf and reading

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Differentiation Guide for Professional Services Firms Second Edition Differentiation Guide for Professional Services Firms, Second Edition Copyright © 2018 Published by Hinge 1851 Alexander Bell Drive, Suite 350 Reston, Virginia 20191 All rights reserved. Except as permitted under U.S. Copyright Act of 1976, no part of this publication may be reproduced, distributed, or transmitted in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher. Design by Hinge. Visit our website at www.hingemarketing.com Differentiation Guide 2 Table of Contents 4 Introduction 5 Chapter 1 Understanding Differentiation for Professional Services 10 Chapter 2 21 Ways of Looking at a Differentiator 15 Chapter 3 How to Find and Own Your Differentiators 20 Chapter 4 Real-World Differentiation Case Studies 25 Conclusion 26 About Hinge Differentiation Guide 3 Introduction Brand differentiation is one of the most poorly understood pillars of professional services marketing. A surprising number of executives and marketers believe that it’s simply not possible to differentiate firms that offer similar services to similar clientele. In fact, this way of looking at the marketplace is the very reason that differentiating your firm is essential. Differentiation is not about being different for sake of being different. It’s about helping your audience make smarter, easier, more confident buying decisions. We wrote this guide to set the story straight. You not only can differentiate your firm from competitors, you must do it if you want to attract the right clients and thrive in an overcrowded marketplace. Here’s what you’ll learn: • Chapter 1 explains the concept of differentiation as it applies to professional services firms and why it is so important. • Chapter 2 examines 21 ways that a firm might differentiate itself. • Chapter 3 steps you through a comprehensive differentiation process. • Chapter 4 explores four firms that have successfully differentiated themselves and how they did it. After finishing the guide, you will appreciate why differentiation matters, understand how it works and know exactly what you need to do to set your firm apart from lookalike competitors in a way that is meaningful and compelling to your target audience. Ready? Let’s get started. Differentiation Guide 4 CHAPTER 1: Understanding Differentiation for Professional Services Have you been competing for work that you are more than qualified to perform, only to be underbid by your competition? Or maybe you have been the one underbidding, which leaves you with paper-thin margins and stalled growth. If you want to stop competing on price alone, it may be time to develop a stronger differentiation strategy. What Is Differentiation Strategy? Differentiation strategy is a deliberate plan to make your firm stand out from otherwise similar competitors in the marketplace. Usually, it involves highlighting a meaningful difference between you and your competitors — a difference that your potential clients would find valuable. A strong differentiator will provide a competitive advantage for your firm. Michael Porter, the famous strategist, maintains that there are only two ways to gain a sustainable advantage over your competition. One way is to compete on price, highlighting the similarities you share with your chief competition: A strong differentiator will provide a competitive advantage for your firm. “We’re just as good as our competition, but we cost less.” Unfortunately, unless you have a sustainable cost advantage, you can’t maintain this strategy for long. All it takes is someone willing to undercut your lowest price. The lowest-cost strategy also exposes you to commoditization and a much wider range of competitors, including do-it-yourself options, off-shoring and automation. Porter’s other way — a better way — is to stand apart. Be different. Separate yourself from competitors in a manner that is both important and relevant to potential clients. Using our definition above, this is a differentiation strategy. A point of differentiation can be broad-based and set you apart from the rest of the industry, or it can be narrower, appealing to a niche market. This latter approach is often referred to as a focused or concentrated strategy. Differentiation Guide 5 Differentiation Strategy Examples Here’s an example of a broad differentiator: adopt a very different business model. Suppose that hourly billing is widespread in your industry. Offering a pay-for-results billing model, instead, would separate you from competitors. Of course, developing a broad-based differentiation strategy, in which your firm is substantially different from your industry as a whole, isn’t easy, especially for established firms. And even if you were able to pull it off, what’s to keep a competitor from copying your approach? This is why many firms choose to compete with a focused strategy. In a focused strategy, you narrow your appeal to a niche audience. Your established competitors — most of which are broadly diversified — are unlikely to follow your lead. For example, an accounting firm that works exclusively with chain restaurants has a very compelling differentiator targeted squarely at that niche market segment. However, a different audience segment, such as automobile dealers, would find no value in working with the restaurant specialists. By being exclusive — not pursuing clientele outside its narrow industry focus — a firm has a real opportunity to dominate the niche they target. Advantages of Differentiation There are some big advantages to using a differentiation strategy. Here are some of the benefits. 1. You do not have to compete on price alone Since you have distinguished yourself from your competitors the prospective client cannot reduce their choice to the dimension of cost alone. 2. You have greater appeal to your target audience Since you are different (and, presumably, better), you become a more appealing choice. This makes it easier to generate interest and close sales. 3. There is no direct substitute If you are demonstrably different from your competitors, you cannot be directly compared to them. Instead, prospects have to focus on the qualitative value of your difference. This adds value that other options lack. 4. You increase loyalty The combination of greater value and the lack of comparable substitutes can generate greater loyalty to your firm. There is no good reason to switch (if you are delivering on your promise) and no comparable alternative to switch to. 5. You can command higher fees If your differentiation adds true value and is not available elsewhere, you should be able to command higher fees. This is especially true if your differentiator is based in specialized expertise. Now, whether your strategy is broad or very focused it must always start by identifying your firm’s differentiators. Let’s begin with a definition. Differentiation Guide 6 What Is a Differentiator? A differentiator is something that makes your business both meaningfully different from your competitors and more valuable in the eyes of your target audience. Differentiators are the building blocks of a differentiation strategy. But simply calling something a differentiator doesn’t make it so. First it must pass three tests. Three Tests of a Successful Differentiator How do you know you have a good differentiator? We recommend you put each one to the test. If it can pass these three critical checks, it is worth developing into a broader differentiation strategy: 1. Is it true? Differentiators can’t be fabricated. Apart from the moral hazard of making stuff up, it is simply too easy for people to see through exaggerated claims. You’ll need to deliver on your promises. For example, many firms say they have superior client service, but they do nothing special to make it a reality. No special policies. No special training. Nothing to ensure it actually happens. The bottom line is they are no different than a slew of competitors that make the same claims. 2. Is it relevant? If your point of distinction doesn’t matter to your prospects, it won’t bring you more business. In the end, what is most important is what plays into your target prospects’ selection criteria and decision-making process. Any irrelevant differentiators are wasted effort. Differentiators are the building blocks of a differentiation strategy. We once had a lobbying client that believed their strongest differentiator was their firm’s lack of conflicts of interest. Their competitors certainly could not make the same claim. But, when we dug a bit deeper, we discovered that their clients and prospects hardly valued impartiality at all. So much for a strong brand differentiator. In our research of professional services firms, we have found another reason to reject client service as a differentiator — buyers don’t even consider it a selection criterion. A lack of customer service may be a reason you lose a client, but it rarely plays into the initial selection process. Unless a buyer has been burned recently by poor service, it’s just not relevant to them yet. Differentiation Guide 7 3. Is it provable? This is the often the toughest test of a differentiator. You may have identified a true and relevant point of distinction, but without tangible proof it won’t stand up to buyer scrutiny. Buyers have become inured to — and learned to ignore — empty claims. Here’s a differentiator candidate that we encounter again and again: “We have great people.” It is a trap! Why? Well, have you ever heard a firm claim they have average people? Didn’t think so. But there are exceptions. One of our clients provides highly specialized software development services — and they hire only PhD-level programmers. They can actually support a “great people” differentiator with hard evidence. The Challenges of Maintaining a Competitive Advantage Once you know what sets you apart from your competitors, you are well on your way to a solid differentiation strategy. Especially if you can explain — and prove — it in a way that is relevant to your target audience. But you are not done yet. The marketplace doesn’t stand still. Shrewd competitors will notice your success and attempt to copy it. Over time, what was once a distinctive characteristic may be neutralized. Your competitive advantage will be lost. To build a sustainable differentiation strategy you not only need to build your reputation around distinctive characteristics, you need to make your expertise highly visible to your target audience. This “Visible Expertise” will become the foundation of your professional services brand1. Why Visible Expertise Matters to Professional Services Firms This brings us to the topic of expertise and why it is so critical to professional services. In the professional services, expertise is what you sell. Clients aren’t buying your services because they like them. They are buying your services to solve a business problem or seize an opportunity. For example, a company may need help complying with a regulatory requirement or solving a critical strategic challenge. 1 https://hingemarketing.com/blog/story/brand-building-for-professional-services-firms Differentiation Guide 8 Our research into professional services buyers2 describes what criteria companies use to select one service provider over another. The most common selection criterion is expertise, and it is the factor that most often tips the scale in favor of the contractwinning firm. But what about the argument that professional services are “a relationship business”? Well, that assumption is partially true. Good business relationships are certainly helpful. As we describe in our book Inside the Buyer’s Brain3, both buyers and sellers of professional services understand the importance of an existing relationship, but sellers consistently underestimate the role their reputation plays in the final selection. Also, a strong reputation for expertise is the one factor that can overcome an existing relationship. If a company does not believe their current provider can solve a problem, they will look for a firm that can. According to our most recent study of referral marketing4, visible expertise plays the single most significant role in driving referrals. Relationships — both social and professional — are still important, but only when there is an awareness of your expertise. 2 https://hingemarketing.com/library/article/inside-the-buyers-brain-second-edition-executive-summary 3 https://hingemarketing.com/library/article/book-inside-the-buyers-brain 4 https://hingemarketing.com/library/article/referral-marketing-study Differentiation Guide 9 CHAPTER 2: 21 Ways of Looking at a Differentiator As we’ve seen, finding a differentiator for your professional services firm is not easy. Many firms struggle mightily, only to come up with a “differentiator” that doesn’t differentiate them at all. But take heart — there are many ways to successfully differentiate a brand. In this chapter, we’ve compiled 21 strategies that work for many professional services firms. Remember, you can have more than one differentiator. In fact, differentiators can often be combined to create a more powerful competitive advantage. 1. Specialize in an industry. This is perhaps the easiest and most successful differentiator for a firm to adopt. Clients value firms that specialize in their industry — they perceive specialists as more experienced and skillful at solving their problems. But be careful. If you try to specialize in too many industries, you will lose credibility. On the other hand, if you specialize in a single industry you could be vulnerable to its economic cycles. 2. Specialize in serving a specific role within your client’s organization. This role-based specialization is also quite successful, especially if combined with an industry focus. If you head IT at a law firm, it’s comforting to know that your service provider specializes in helping people just like you. 3. Specialize in offering a particular service. This approach can also be quite successful, especially if the service you specialize in is rare. But beware, unique service offerings can quickly become mainstream. Your success may be noticed and copied by others. There are many ways to successfully differentiate a brand. 4. Offer a truly unique technology or process. By truly unique, we mean a process that approaches the problem in an entirely new way and offers a unique benefit to the client. Most “proprietary methodologies” fall well short of this standard. Differentiation Guide 10 5. Focus on understanding a particular target audience. A key differentiator for some firms is their in-depth understanding of a specific audience. For example, your firm might specialize in marketing to Baby Boomer women, and your clients might be retirement planners, insurance companies, and clothing retailers. 6. Specialize in serving clients of a certain size. This is a common differentiator, although some people don’t think of it as one. For instance, some firms work exclusively with the largest companies in the world. Contrast that with a firm that focuses on solo practitioners. Either firm could have a competitive advantage over a firm that serves clients of all sizes. 7. All of your staff shares a specific characteristic or credential. Almost every firm believes it has a great team, so it can be tough to make the quality of your people stick as a differentiator. Buyers hear this claim so often, it’s become background noise. But if you hire people with rare or exceptional qualifications (think top consulting firms like McKinsey or Booz Allen that vacuum up Ivy League grads like crumbs), you can still make a good case for it. 8. Specialize in clients that share a common characteristic. This differentiator focuses on a client characteristic rather than an industry or role. Let’s say you provide accounting and tax services for expatriates. They might come from any country, industry or corporate role, yet you will have a competitive advantage over firms that don’t serve that niche market. 9. Focus on solving a specific business challenge. In this case, the spotlight is on the nature of the business challenge your clients are facing. Their challenge must be common enough that the market can support your revenue goals, but difficult to solve without specialized skills and experience. An example might be a firm that helps businesses secure their first government contract. 10. Have one or more individuals who are high visibility experts in their fields. To have one of the country’s top experts in your specialty on your team can be a very powerful competitive advantage. Many firms’ reputations are built on this differentiator alone. Add multiple high visibility experts and you will have a compelling and exceptionally valuable brand. A unique business model can be both meaningful and easy to prove. 11. Offer a unique business model. Suppose everyone in your profession bills by the hour, but you offer services for a fixed fee. Voilà, a perfect differentiator is born! A unique business model can be both meaningful and easy to prove. But be watchful. If it works well, you are likely to accumulate imitators. 12. Have a specific geographic focus. This time-honored differentiator is losing some of its punch today, as technology makes geography less important. But it can still work when clients value local knowledge or face-to-face interaction. Differentiation Guide 11 13. Offer access to a unique set of information not available elsewhere. Sometimes, access to certain information can be very valuable to potential clients. Do you have a dataset (for example, benchmarking data) that no one else possesses? Some firms have built very valuable practices around proprietary data that is not easily duplicated. 14. Offer a unique set of contacts or relationships not easily accessible. While the previous differentiator focused on information, this one features relationships. Public relations firms have long used relationships with reporters and editors as differentiators. Lobbying firms have powerful government contacts. What valuable relationships can your firm bring to the table? 15. Do business with a truly distinctive level of service. Every client expects you to deliver good client service. But to be a differentiator, your service must be truly exceptional. Delivering service at this level is not easy, and to rise above the noise — that cacophony of firms that say they provide great customer service — you’ll need solid evidence to prove it. 16. Distinguish yourself by the clients you have. Having an impressive client list is a plus for many firms. But what if you take it further? Some firms differentiate themselves based on their client list. For example, if your firm serves the higher education market and your clients include Harvard, Yale and Stanford, you have a differentiator. 17. Focus on the size of your firm. We are the largest ___________________ (fill in the blank). Size sends a strong signal that you are doing something right. And when you can combine size with a specialization, you communicate both relevance (the specialty) and success (the largest). Find your niche and dominate it. 18. Emphasize your relationship with a parent firm or partner. Being bound in a close relationship with a parent firm can be a limiter (for example, if you are owned by a large software firm, some potential clients may feel like you can’t be objective about other companies’ technologies). But for other prospective clients, it can be ...
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Final Answer

Hi pal, Here you go

Creating Differentiation outline
I.
II.

What differentiation is and its importance
Importance of testing our differentiators and 3 of the most common challenges companies
face when developing their differentiator

III.

Ways of Looking at a Differentiator

IV.

Differentiation Analysis Framework

V.

Building a long-term sustainable differentiation strategy


DIFFERENTIATION

1

Assignment #3 –Differentiation
Name
Institution affiliated

DIFFERENTIATION

2
Differentiation
Definition

Differentiation does not entail just being different from others. It involves enabling
customers to make wiser, better and confident purchasing decisions. It is a marketing strategy
whose main aim is to make particular services or products stand out, discerning them from other
similar products or services offered by their competitors (Hinge, 2018). It involves coming up
with a significant difference between a firm's products and those of its competitors, thus making
potential customers prefer the differentiated products.
Importance
Differentiation not only enables products to stand out but also benefits firms in many
different ways, mainly due to the intense competition between firms nowadays. First, it leads to
increased customer loyalty (Hinge, 2018). When a differentiated product gives a great value that
cannot be found in substitutes, customers become loyal to the product. Also, differentiation gives
a competitive advantage over other competitors because apart from price, they get another
competition tool. Even when competitors reduce their product prices, potential clients ch...

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