How to differentiate differentiation?

On the other hand, when a large number of companies embark on a similar journey to separate themselves from the pack, differentiation itself becomes a method that needs to be differentiated. Differentiation for its own sake carries the risk of achieving the opposite effect. Thus, it is important to understand what the key elements of a strong differentiation approach are. Below, we will try to list some key points for achieving differentiation successfully.

• Know your sweet spots. In any given industry, it is vital to identify underserved areas, which require different products and services to answer their needs. Although most niche areas are very easy to see in hindsight, it is harder to do pre-emptively. Finding sweet spots requires a deep understanding of the industry, including its history, its dynamics, and areas where customers need different services. It is important to know by heart what worked and what did not work in the past.

• Close surveillance of industry and technology trends. Nowadays, change is the only constant and it affects almost all industries both business-wise and technology-wise. Understanding and following trends – not only the known ones but also the emerging trends – and studying the potential impact areas of these trends are critical to stay on the cutting edge of true differentiation.

• Deep design thinking. As the saying goes, nature is not an inventor but a tinkerer. Having identified industry sweet spots and industry trends, developing and trying out different ideas with a design-thinking approach is a key step along the path to differentiation. Finding different and successful solutions will require more than a single-shot approach; you have to try different things, establish partnerships and develop prototypes. Sometimes, you have to drop ideas, draw lessons and proceed with other potential solutions. 

• Single-minded execution. It is true, you have to try many different paths and ideas to come up with a novel and hard-to-imitate solution. However, after deciding on where to go, execution is everything. In terms of financial resources, organizational capabilities and team strengths, every possible tool should be channeled towards executing the differentiation strategy.

Working on differentiation when every company tries to stay ahead of the pack is not easy. Oftentimes, some attention should be dedicated to differentiating the strategy itself.


The views expressed in this article are the views of the author only. This article provides general information and a point of view; it should not be considered as professional advice.