Tactical vs. Strategic Differentiation Techniques

Any company that is going to survive and thrive needs to understand why it is different from all of the alternatives out there now and those to yet come.

Here are some examples;

• we have a better quality product than anyone else
• our customer service is great
• we are cheaper than anyone else
• our people are experts
• our product is protected by patents and copyright
• our brand stands for something

What I find interesting is that some of these are easier to do than others and some will be quicker to copy than others.  You can drop your prices overnight but you can't create a brand reputation overnight.

This means that some differentiation methods are tactical and some are strategic.  If it's quick and easy to do, it's tactical, if it's difficult and takes longer, it's strategic.

A company's long term value is ultimately tied to it's ability to be different and to be meaningful, in a way that is difficult to copy. (Think: If it were easy, everyone would do it).

Warren Buffet once famously said " “In business, I look for economic castles protected by unbreachable 'moats'."

A moat is a source of differentiation that is difficult for a competitor to beat.  With that in mind, you can understand why he invested in Coca-Cola.  It has one of the strongest brands in the world.  (5th in the UK in case you were wondering.  Source: Superbrands)

With that in mind, here's a chart showing various differentiation techniques and how they typically fall on the tactical versus strategic axis.