We throw around a lot of jargon in the business world, but do we truly know what we mean when we talk about âVisionâ, âBusiness Modelâ, âPositionâ?
Weâre going to talk a lot about Positioning on The 3rd Button in the coming months, but weâll spend the first few weeks with a clear definition of terms.
Today, we delve into what ‘Business Model’ really means…
-A strong and differentiated business model is the most effective of all marketing tools. If your business is differentiated, your brand will ultimately be differentiated. Obviously, marketers can build highly differentiated brands out of non-differentiated businesses, but the degree of difficulty is so much higher.
-It’s hard to see how you can have a strong and differentiated business model without an equally strong and differentiated sense of vision behind it. On the other hand, a strong vision doesn’t need a highly differentiated business model to succeed.
-Whereas Wal-Mart’s business model is deeply entrenched, highly differentiated and creates differentiated advantage, most packaged goods brands lack this luxury and have to create difference at the product and marketing communication level.
HERE ARE SOME STRONG, NEARLY UNASSAILABLE BUSINESS MODELS
-You can certainly out-communicate Wal-Mart and Southwest, but good luck to you if you think you can compete directly with them when it comes to their business models. While I tend to believe marketing can win any war, these are not competitors I’d like to test my conviction on.
-You can compete with McDonald’s, but unless you can actively “de-position” it in some sustained way, the company’s operational excellence will wear you down over time. Operational excellence doesn’t sound unassailable, but finding an Achilles heel Â when it comes to companies like these is a way harder than most people realize.
-Amazon has- relatively quietly- placed itself into a position from which it can attack new markets. That elevated position also means that competitors will have great difficultly scaling the walls of Amazon.com.
Stay tuned for our next term as defined by Austin McGhie, Sterling Strategy