Over the past three months, I’ve had many interesting and enlightening phone calls with trucking executives from all over North America. Most of these conversations have been both pleasant and productive. Although the term ‘benchmarking’ is a relatively unknown term to many, almost every Owner or Executive I speak to is open to evaluating any tool which will potentially increase profitability, efficiency, or perhaps reduce overall corporate risk. However, I thought it would be interesting to share a conversation I had last week with an executive of a large Motor Carrier with multiple terminals throughout the Continent. (more…)
“You’ve got to eat while you dream. You’ve got to deliver on short-range commitments, while you develop a long-range strategy and vision and implement it. The success of doing both. Walking and chewing gum if you will. Getting it done in the short-range, and delivering a long-range plan, and executing on that.” – Jack Welch
This post is the second in a series of posts focused on Strategy and Competitive Advantage. By the end of this series, it is our hope that the info we provide will at the very least provide the motivation to look a little harder at your business and the competitive landscape your organization faces.
Last week, I provided a quick overview of an analysis/decision framework called “Porter’s Five Forces Analysis” by Michael Porter. This framework is a powerful tool, that enables its users to quickly understand their market position, threats and opportunities. One of the next steps after analysis is to honestly evaluate your operations, your customers and ways to build real competitive advantages. To build real competitive advantages, by nature they must be things that utilize specialized knowledge, equipment, systems or resources which are difficult or (better yet) impossible to build, duplicate or acquire. Competitive advantages are not necessarily qualitative advantages such as having a strong customer service culture. However, in my opinion, qualitative advantages can eventually turn into massive competitive advantages, but normally only when paired with something tangible as described above.
For trucking, building a competitive advantage requires knowing your customer’s needs (sometimes better than they do), and providing solutions that are mutually beneficial (profitable). A great example of this process was illustrated by the owner of a (then) mid-sized trucking company. For ten years, his company provided truckload services to a client with multiple manufacturing facilities in Ontario. After hearing about an innovative new trailer, this entrepreneur went back to his customer and proposed utilizing this new trailer system to build more of their finished product at one facility before shipping to their other facility to be finished. After carefully reviewing his proposal, they wholeheartedly jumped at the idea. Not only did he convince them to move forward, he also got them to finance the trailers, and guarantee enough freight to cover the financing plus overhead! So, not only did he build a real competitive advantage, he got the customer to finance it! I thought it was brilliant. He was very humble in rationalizing how it all unfolded, but it was very apparent that none of it would have occurred had he not appealed to the customer’s self interest.
The above is a practical example of someone leveraging specialized knowledge, specialized equipment AND a solid customer relationship to build a real competitive advantage. How many solid customer relationships do you have? How often do you visit their facilities? Do you understand their business model? In my opinion this is the first step in translating specialized market knowledge into a functional strategy.
For some comic relief, I leave you with the best marketing campaign I have ever seen, enjoy…