brand strategy

Four Business Competition Strategies for 2021

Aine Hendron
5 Jul 2021

Companies use business strategies to appeal to their customers. These strategies include approaches to marketing, branding, and pricing.  

Famous business strategists Fred Wiersema and Michael Treacy, whose methods we’ll cover in this article, say that if a company attempts to pursue multiple marketing strategies at once, it is likely to end up stuck in the middle, offering average products for average prices [1]. 

We define four key business competition strategies that 2021 market leaders use, and explain why your company should adopt these methods today. 


Differentiation is an extremely beneficial competition strategy that requires long-term research and development of products and brands [2]. 

It aims to highlight the unique selling point (USP) of a product or service, with emphasis on why it’s different from products already available on the market.

To give an example, customers have ample options in the smartphone market. All smartphone manufacturers offer products that have many of the same features, have similar pricing, and target the same demographic of customers. 

Despite this, consumers are typically able to shortlist their choice of phone down to two main brands, usually Apple or Samsung [3].

  • Apple position themselves as creators of high quality, aesthetically pleasing devices which are part of a large and innovative product line [4]. 
  • Samsung products are synonymous with high-tech features, great engineering, and providing a catch-all solution to consumer’s needs [5].

Differentiation specialist, Michael Sherain, highlights the elements of traditional marketing that differentiation uses as a springboard: 

Traditional Marketing Strategies

Strategic Differentiation 

Optimises a portfolio of businesses

Optimises a portfolio of brands

Aligning organisation with strategy

Aligning culture with desired reputation

Targeting a desired industry ranking

Targeting a desired reputation 

Marketing drives sales

Marketing drives positioning

Tracking financial/sales performance

Tracking positioning performance

Sherain also notes that almost all industry leaders use strategic differentiation, and it is the reason why they are so successful [6]. 

Differentiation strategists use the components of traditional marketing, but advance them to appeal to a wider customer base. While traditional marketing is very keenly focused on revenue and profit, differentiation focuses on brand establishment and reputation. How a product or service is perceived by potential customers is extremely important when positioning a company via differentiation. 

The values discipline model 

In Treacy and Wiersema’s 1995 book, The Discipline of Market Leaders, it’s argued that no company can be all things to all people. Businesses must find the unique value that they alone can deliver to a chosen market. 

Treacy and Wiersema suggest three ‘Value Disciplines’ that should shape every subsequent plan and decision a company makes. The three value disciplines are operational excellence, product leadership, and customer intimacy.

1.Operational excellence 

Operational excellence strategists try to achieve cost leadership. Cost leadership is when a company uses their pricing as their most attractive selling point. Companies who use this competition strategy must continually price their products and services as the lowest on the market, or at the very least, lower than their competitors. 

This is a challenging strategy to maintain since companies are constantly tasked with reducing their costs while generating a profit and providing high-quality services. Cost leadership does not mean that a company produces goods that are of inferior quality at comparatively cheap rates, as that will ultimately lead to failure [7]. The combination of decently priced produce that is still high-quality and desirable can be referred to as a strong value proposition. 

Many market giants use cost leadership. Wal-Mart, and its UK subsidiary ASDA, are renowned for their slogans: “Save Money. Live Better.” Competitive pricing is the focus of their marketing plan. [8]

McDonald’s are also known for having very affordable prices, yet their food is still highly regarded by many fast food lovers. McDonald’s use cost focus and differentiation simultaneously as their principal marketing strategy [9]. Many companies adopt this strategy in some form. 

As the name suggests, to achieve operational excellence, having an extremely efficient product chain is a necessity. Companies don’t have to completely sacrifice their markup margin in order to continue earning. They simply have to focus on reducing their costs in order to maximise revenue. The main focus is on automating the manufacturing process and work procedures to streamline operations and reduce cost. The strategy is centred around high-volume, transaction-oriented and standardised production that doesn’t require much differentiation [10].

2.Product leadership

Product leadership focuses on offering customers industry-leading products and services that consistently enhance the customer’s use or application of the product. Therefore, reducing the need to shop elsewhere or purchase competitor products. This strategy focuses on innovating new products inspired by gaps in the market, creating large, in-demand product lines, and fine-tuning their existing products and services. To return to a previous example, Apple is well known for using product leadership as one of their competitive strategies. 

Managers in product leadership-focused businesses make decisions quickly, since being recognised as being the first company to infiltrate a certain market is important in this strategy. Because of this methodology, product leaders are regarded as their own fiercest competitors [11]. If a flaw in one of their own products is perceived, this provides the opportunity for competitors to swoop in and offer a solution. In product leadership, creating a better version of one of your own products, and thus rendering it useless/outdated, is better than allowing a competitor to do it. Re-model, re-master, re-innovate. 

Successful product leaders should have the ability to manage risk well. They must be able to spend potentially a lot of money on a new product, which isn’t guaranteed to succeed. Bringing a new product to market also risks damaging the reputation of a business. But, product leaders have to be extremely analytical and considerate when deciding how to proceed with business in order to stay ahead of their competition. This method works best with larger-scale companies who have an established brand and large capital.

3.Customer intimacy 

Customer intimacy strategies focus on taking a keenly customer-centric approach. Operational excellence plays a part in customer intimacy, as part of this strategy is understanding customer’s financial needs and wishing to offer good value for money. Product leadership also has a part to play, since customer-focused entrepreneurs will flex to create products that meet customer’s needs, however specific and personalised they are. 

At the root of this strategy, proving the best, most intimate experience is extremely important. Customer intimacy strategists want to be the customer’s go-to brand. At the core of this method, businesses that use customer-focused strategies think less about cost advantage, less about originality, and more about utility and understanding what customers want and how they want it. Customer intimacy is at the root of Amazon and IKEA’s business models. They do not appeal to niche or targeted markets, but on meeting the demands of all through a large and varied product range. 

Stay ahead of the competition with POS

Allow Epos Now to take the heavy lifting out of your competition strategy. To find the most relevant point of sale (POS) solution for your sector, check out our Retail POS Software, or our Hospitality POS Software. Specially designed sales technology will streamline management processes and provide valuable insights into profitability, allowing you to make better-informed decisions for your business. 

With over 100 app integrations possible, why not link your Epos Now system with your marketing software? This will allow you to create targeted campaigns based on your customer’s purchasing behaviour, meaning you can provide more relevant, engaging content. Build automated email campaigns that encourage repeat business, customer feedback and rewards for both first-time, and loyal customers. 

You can also link your POS software to your accounting software, so you can monitor your campaigns’ performance against your sales and financial targets with ease. 

Get in touch with one of our expert advisors.

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