Defensible Position

The other night, I was teaching a class about Internet Communications and in the course of the evening we ventured into scary waters. I asked the class – “What is your defensible position?” Silence. Deafening Silence!

What is a defensible position? I tend to think of it in two steps –

• What do you do different from the existing competition? (Competitive Advantage)
• Can you sustain the differentiation?

Most folks I work with can easily articulate the first piece, but it starts to fall apart when you consider part two. For example, many retailers use price as a competitive advantage. “We will not be undersold!!”

But without the economies of scale of a large organization, many small businesses price themselves out of business. Sure they can be the cheapest (that’s their competitive advantage) for awhile, but eventually their margins are squeezed, their costs mount and they have to raise prices. Now their customer base, whose expectations were developed solely on cost, moves on to the next cheap deal.

So when you look at your business, you can probably answer how you can differentiate from your competitors - but the true entrepreneur can survive the test of time.