Through the implementation of supplier diversity initiatives, Indigenous suppliers have the opportunity to do business in a more expansive market. To be successful in this space, Indigenous businesses need to be driven, passionate and competitive. Read on as we share our tips on creating and maintaining the competitive edge.
Supplier Diversity opens doors to opportunities for Indigenous businesses to compete on a level playing field. It is then up to them to differentiate themselves from their competitors to win the business. As we are all aware, competition is what keeps all businesses on their toes. Indigenous businesses need to identify points of difference and communicate those to potential customers.
To survive in a heavily saturated competitive environment of demand it is essential that Indigenous businesses create and implement strategies that will effectively promote, advertise and sell their products and services. The winning of contracts can be challenging in itself, and more so, if the business tendering has no strategy that distinguishes them from the competition. Therefore as an Indigenous business, understanding your competitive edge is critical to your success and survival.
When creating a competitive edge, businesses must first know how their business ‘stands out’ in the crowd. It can be their offering of unique features, benefits, or services that are associated with their products. If they pinpoint these features and combine them with the identification of the “most important criteria used by buyers in their market”, they can then design strategies that will assist (suppliers) in their “product and services offerings in a way that best meets those criteria’s.” (Kokemuller, 2007)
How to define your competitive edge?
Indigenous businesses certified with Supply Nation must decide how they will compete. In order to define their competitive edge, they firstly need to define their product and service offerings and then identify how they will stand out in the highly competitive environment.
Ways your business can stand out from the crowd:
1. Understand your product and/or service
Understanding your product and/or service is paramount to selling it effectively. Ask yourself: Can you offer a product or service that is unique in the market? Can your product and service compete with other suppliers who have been in the game for years? It is important to understand that in the business environment, change is constant and your business will need processes in place that will allow quick responses to the changing market.
2. Be the expert
Once you have developed your product and service, be the expert in that field. Build your understanding of the market domain in which your product or services delivers. Have the ability to identify threats and opportunities. For example, you’ll need to identify the threat of new entrants to the market, the potential buying power that exists, and the threat of substitutes. Also, it’s important to be an expert on supplier diversity, and to understand why the company you are working with is committed to supplier diversity and a member of Supply Nation. Knowing this and being an expert will give you an advantage and something to use in your communication
3. Know and understand your customers
A successful business knows their customers! Understanding your customer needs and wants is important in the successful delivery of your products and service. Once you have this knowledge, “you can use it to persuade potential and existing customers that buying from you is in their best interests” (Info Entrepreneurs, 2013).
You’ll need to know:
- Who they are
- What they do
- Why they buy – particularly their business case for supplier diversity
- When they buy
- How they buy and;
- What they expect from their suppliers
Knowing and understanding the above will assist in marketing your business and separate you from your competitors.
4. Know your competitors
Knowing your competition is like knowing your customers. Having knowledge of existing competitors will also aid your business in creating strategies that will set your business apart
You’ll need to know:
- Who they are
- What they do
- Who they supply to (target audience)
- How they supply (distribute) and;
- How they position themselves in the market
Highlighting these areas will identify aspect of your products and services that will serve as the foundation for differentiating your business from others in the same market domain. It may also identify niche markets for your products and services that are not being fulfilled.
5. Partner with your customer
Indigenous businesses need to be able to compete over the long run; their longevity can be assisted through partnerships and alliances. Certified Indigenous businesses have the benefit of creating and sustaining meaningful relationships with Supply Nation Members, which will not only give them the opportunity to compete but also create partnerships that will nurture longevity. Forming a partnership can assist you to win more business, build your capacity and deepen the relationship with your customer.
6. Tell customers how you are different
Once you have identified the above aspects, your business should have developed a strategic marketing direction that will promote and advertise your business to the identified target audience – with a message that satisfies their expectations, needs and wants.
Once you have the appropriate strategies and processes implemented, it’s important to make sure you deliver on the promises made to customers. Some businesses neglect or are just simply unaware that after purchasing, all customers go through a phase referred to as “post purchase evaluation.” This is the phase in the decision making process that customers identify whether or not they will re-purchase your product or service again. Thus, it is important for Indigenous businesses to be open to constructive feedback from buyers and for buyers to express if suppliers have not met expectations.
The business world is a competitive environment. Supplier diversity programs provide a level playing field for Indigenous businesses to compete, in supplying their goods and services to large corporate and government buyers, however that alone will not provide a competitive edge. Identifying the unique features and benefits that differentiate your business from others in the market is a crucial step for success. It is essential for Indigenous businesses to pinpoint their unique selling position. They need to become expert in their industry, know and understand their customers (current and potential), their competitors, market trends and deliver on their promised value.