X-Factor
Posted on 26th April 2022 at 11:51
You can survive in business for a while in an attractive market without a competitive edge but if
you want to survive let alone thrive in a challenging market then you will need a competitive edge –
or X-Factor.
What is exactly is an X factor? The X-Factor is an age old idea. It is using your company’s unique
skills and resources to implement strategies that competitors cannot implement as effectively. Also
known as a competitive edge or competitive advantage.
It could be in your Offer position, it could be in your Cost Position or it could be a combination of the
two.
It’s your secret sauce, your secret ingredient – something you know how to do that others don’t. In
Apple’s case it is mainly their ability to innovate, in McDonalds (going right back to the days of Ray
Kroc and the McDonalds brothers, it was their innovation to bring the average customer wait time
down from 30 minutes to 30 seconds. This is a great example because they challenged the accepted
‘norm’ and did something about it. They answered the question ‘what bugs us about our industry’
and focused on making it better.
It doesn’t always have to be something that will disrupt your industry – clearly all the well-known
examples do but it could be something that just gives you that ‘edge’ over your competitors. Ideally
whatever it is should be something that you can defend, that isn’t too easy for your competitors to
copy (they will eventually if it is good enough, so be prepared to evolve it) and it should be a source
of power or ‘leverage’ for you.
So how do you go about finding yours? Start with all the good stuff we have discussed before –
around core purpose, core values and your ‘hedgehog’ (which we will look at shortly) – which gets
you the answers to:
• What are we really passionate about?
• What can we be the best at, or if not the best then really really good at
• What does the market/ customer really want and is prepared to pay for/ what is the pain?
If you find your X-Factor then keep it secret and act on it. Keep it close to your chest until you can
fully exploit it!
Of course, even huge advantages don’t last forever. If you are able to make profits well above
industry norms then someone is going to notice and find a way to copy you or find a different way.
So you should never stop looking for ways to keep competitors in your wake. You don't want to be
caught unprepared. Fortunately, there are unlimited ways to find a competitive edge. The key is to
pull yourself away from day-to-day operations long enough to think more broadly about your
business from an outsiders perspective. Brainstorm with your team, bring in people from outside
your business/ sector – perhaps other business owners. But there is an X Factor inside you and your
business!
BizSmart's new book covers X-factor as well as numerous other topics as a companion for your ScaleUp journey. Visit the website and order here.
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