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Leadership – A Function of Differentiation

20th March 2016

Is differentiation a function of leadership or is leadership a function of differentiation? At university, it was taught that differentiation was a strategy of leadership. Yet, without clear and continued differentiation, you cannot lead a market in a sustainable manner.

Differentiation is not just the focus or purpose of marketing, it is marketing! Without differentiation, there can be no leadership, no competitive advantage, no ability to shift a market. It follows that in order to call ourselves marketers, true marketers, we need to achieve that highest level of differentiation.

What does it mean to be number one in your market? That depends on what your market is. To have meaning, differentiation has to ‘matter’ to your market or market segments. For example, you may not be able to claim market leadership within the leasing market. However, you may be the legitimate market leader in vendor leasing for fork-lift trucks and printing equipment, which is far more relevant to your target audience.

As an aspiring or actual market leader, you are likely to have credibility, authority and, if you are operating in a profitable segment, command a price premium over and above that of your competitors.
Here are some examples of leadership positioning strategies:

• Innovation/Creativity
• Style/Image
• Market Share/Size (within segment)
• Technology/Pathfinder
• Quality/Reliability
• Service/Responsiveness
• Flexibility/Agility
• Relationship/Channel Partners
• Prestige/Exclusivity
• Sector Knowledge/Specialisation
• Technical Expertise
• Global/International
• Regional/Local
• Bargain/Cheapest
• Value/Superior Cost Benefit

Please note that we have not used ‘Longevity’ as a leadership criteria, yet how often do we read words like “established in 1874”, as the opening sentence in corporate literature!

Now, consider those areas in the above list where you can command a leadership position. Which are transient and which are the most sustainable? Which of these when bundled together offer your financial organisation an unassailable and sustainable competitive advantage?