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Explanation of Using Location for a Competitive Advantage in Business. Also refer to company, sales, differentiate, undermine, superior, web address, predatory, national, undercut, defend, attack, niche, Ron Kurtus, School for Champions. Copyright © Restrictions
Using Location for a Competitive Advantage in Business
Using Location for a Competitive Advantage in Businessby Ron Kurtus (27 May 2007)
One way that a company can beat another company in getting sales is by having a superior business location. If the competing company already has a good location, another strategy is to weaken or undermine that location. If your superior location is being attacked, differentiating from the competition may help stave off the attack.
Questions you may have include:
- How do you do get a better location?
- How can you undercut a location?
- How can defend against a location attack?
This lesson will answer those questions. There is a mini-quiz near the end of the lesson.
Getting better location
The great adage for business success is "Location, location, location." You want to get a location for your store that is easy to access and convenient for shoppers. You want a location for your factory that is readily accessible to suppliers and distribution channels, as well as supply of workers.
Online businesses should have a web address that is memorable and easy to access. They may need to register similar web addresses, in case of user misspelling. A number of top web addresses have meant instant success for the owners. But also, the website should be convenient to use and should offer a good line of product.
It is important to seek a better location than your competition in order to gain a lion's share of the business in your area.
Undercutting the competition
Some businesses use a strategy of trying to undercut or diminish the location of their competitors. This is especially true of larger, predatory companies.
As they were expanding, national chains Barnes & Noble bookstores and Starbucks coffee houses were known to build a store near a good location of a smaller local business. They usually drew enough customers from the smaller retailer to drive them out of business.
Osco and Walgreens drug stores have tried to undercut each other's location by building stores nearby. This has resulted in the bizarre situation of seeing two large drugstores across the street from each other in many areas. Both companies seems to lose from this strategy.
Some e-commerce businesses will get a URL or web address that is similar to a competitor, so as to draw business from their opponent's site.
Defending against attack
If a competing business of the same size tries to undercut your location by opening a store nearby, you can defend against such an attack by improving the quality of your business and providing something unique that differentiates you from the other business.
But unless you can draw enough business to overcome the others' presence, you may still suffer a loss in sales.
You can use the same strategy if a larger, richer business horns in on your turf. Becoming a specialty business with a niche market can save some businesses from attack.
Summary
Superior business location an important way to beat your competition in getting sales. If the competing company already has a good location, another strategy is to weaken or undermine that location. If your superior location is being attacked, differentiating from the competition may help stave off the attack.
Location is essential
Resources
The following are resources on this subject.
Websites
Books
Top-rated books on Business Competition
Mini-quiz to check your understanding
1. Why is the location of a store so important to succeed in business?
2. How could you beat out a successful local business?
3. Can you beat out a larger business that moves near your location?
If you got all three correct, you are on your way to becoming a Champion in Winning Competitions. If you had problems, you had better look over the material again.
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Using Location for a Competitive Advantage in Business