Developing Strategy:
Establishing a Competitive Advantage
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Organizations must clearly understand where they are perceived along the competitive continuum. What is our reputation? What is our perceived value to those we serve? Are we the “in” place to get eyecare and eyewear in our community, or is our public perception less flattering? To be truthful, many do not really know, because they do not understand how to answer these important questions.
This article will address how to evaluate our competitive position and our competitive advantage. In today’s eye care marketplace this is important, and we must always attempt to be vigilant in our efforts to remain on top, or get there. Why does a patient come to your office, when they can go to many other providers? If you cannot answer that with some level of certainty, then you need to read on in this article to gain an understanding of how to give yourself the competitive advantage.
The Process
Every organization needs to have an objective view of where they stand, and that requires we follow a process. One this author recommends is a SWOT analysis. SWOT is a well used acronym for: Strengths, Weaknesses, Opportunities, and Threats. This important activity should be a part and parcel of a continuous quality improvement program, and should be completed regularly as a component of the strategic planning process for your organization.
The first step in the process is to evaluate the organization’s strengths. What makes us great? What makes us successful? What are the things we do correctly, and what we should capitalize on to make us competitively viable as an organization? These and other questions should be done as objectively as possible to really gain an understanding of our strengths. They should be based on value, rareness of our services and offerings, imitability - can what we do be easily imitated, and sustainability - can we continue to perform at the same excellent level day in and day out.
Second, we look at weaknesses. They are things we may not do so well. What areas do we need to improve upon, and what are we doing incorrectly. No one individual or organization is the “best” at everything they do, and we must understand where we are weak to be able to key on strengths and minimize damage from the weaknesses and improve upon them.
Next we need to evaluate opportunities. Are there opportunities for expansion, new markets, increasing sales revenues with the addition of new products or services, and finally is there room for improvement?
Lastly, we must look at the threats organizations face, and they are many in the optical industry. Outside sources always want to take your market share and you must remain ever vigilant to remain competitively viable in today’s health care market; in particular the eye care industry. Can someone imitate us and do it cheaper? Can someone else do it more efficiently? Is a competitor’s training and/or education better?
Notice that the strengths and weaknesses are internal in nature. These are things we have some control over, and can improve or focus upon rapidly. For example, if we have expertise in a specific area, say contact lenses, and it is a real strength, why not make that a focus of our marketing efforts? You may be weak in the lab, so consider hiring someone to do that for you, or farm it out. Work on your strengths, but at the same time, try to improve constantly in areas in which you are weak.
Opportunities and threats are external, and we may not have control over them. We can however affect them by gaining an understanding of the forces involved.
Porter’s Five Forces
Porter indicates that there are 5 main forces in competitive positions.
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Rivalry- how fierce is the competition?
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Substitutes- can someone else take your place easily?
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Potential threat of new entrants- is a new competitor a reason for concern?
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The bargaining power of buyers- can we be affected by third party payers?
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The bargaining power of suppliers- how is your relationship with the manufacturers?
If you really think about it, these are the market forces we deal with in the optical industry daily. Interestingly, Porter also provides us with several competitive strategies that I have seen work for many organizations.
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Low Cost Leadership- the discount house. Many small offices open with low process being the focus.
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Differentiation Strategy- In this mindset, you differentiate yourself from the pack. I have a close friend who only does “high end” dispensing. He is only interested in a specific clientele. Another OD friend only sees difficult contact lens fits.
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Focus Strategy- this strategy requires that we focus upon a specific population. Do you want to attract a specific population to your practice? If so, find a way to set yourself apart from the pack to make your office more attractive to that group.
Contemporary Issues
What we must determine in this process is:
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Where are we today?
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Where do we want to be in five or ten years down the road?
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Where do we fit in the future marketplace, something my optician friends and I discuss
regularly?
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And lastly, how do we find the correct fit?
These are serious issues and we must understand that no matter what anyone thinks, there are professions that go by the wayside. Think about the man who repairs watches? The demand is not what it used to be in that field, and I’m sure you can think of others. Are you at risk?
Eye Care Industry Specifics
Our industry is in a period of transition and change, particularly for the optician. Opticians must undergo some serious self-evaluation as a profession to fully establish their role in the eye care delivery system of the future, and I hope we are moving in that direction. Many offices now advertise not for opticians, but for techs...“No training required, will train!” And they wonder where the quality went? Fortunately most recognize the value a good optician brings to a practice or organization, but things can still change.
ODs are constantly planning for the future, with concerted efforts to expand education and training, and scope of practice opportunities. But even the ODs, with all of their planning, are seeing most new graduates move to a corporate practice upon graduation from school. Opticians and optometrists used to be small, independent operators, but today that has changed. There are still many independents in some areas of the country, but if they are to remain, they must understand the forces that affect them. It is important to undergo a regular process of improvement to remain at the top of their game. Small independents may not be best suited for the low-cost leadership in a given market, but they can certainly differentiate themselves, and focus on particular market segments.
Maintaining competitive advantage is obviously important for our organizations. To keep on top of this ever-changing market, we must understand how to effectively navigate through the ever-developing eye care marketplace. I hope this article provides some idea of ways to accomplish that task and helps you maintain your competitive advantage.
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