I'm curious....

Discussion in 'Growing and Managing a Business' started by talltom, Nov 16, 2010.

?

Maximize My Profitability or Increase My Competitive Advantage

  1. Maximize My Profits

    2 vote(s)
    50.0%
  2. Increase My Competitive Advantage

    2 vote(s)
    50.0%
  1. talltom

    talltom
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    Hey all,

    I'm doing a bit of research here, and wanted to float this past you...As a business owner, which would resonate more with you? A product that offered to help you maximize your profits, or a product that helped you achieve a greater competitive advantage?

    I'm really curious to see the feedback on this.

    PS - Looks like the poll is above this thread, right below the banner ad....

    Talltom
     
  2. PaulPinnacle

    PaulPinnacle
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    Perhaps I'm missing the context here, but I'm not sure I see the point of the question.

    For those that might answer 'greater competitive advantage', surely the reason they would want this is to maximise their profits? So if I'm keen on a product to provide a greater competitive advantage, it is to maximize my profits. With that in mind, can anything be gained by the query? (Not trying to be harsh here, I'm just not sure if I understand what you're trying to achieve)
     
  3. talltom

    talltom
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    Paul, thanks for the observation. You're at least partly right, at first glance they would seem to imply the same concept. Or do they? And do people respond differently to the two phrases.

    As a student of achieving a practical competitive advantage, I can tell you that there's more to 'competitive advantage' than mere profitability.

    This poll isn't terribly scientific, but I'm just doing a bit of split testing here.

    Talltom
     
  4. Fergal

    Fergal
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    Welcome to Business Advice Forum talltom, thanks for joining and posting your poll. I agree with Paul's comments, however when forced to make a choice I voted for "Increase My Competitive Advantage".

    Improved competitive advantage might yield more profits in the long term, whereas doing something to increase short term profits, could result in reduced competitive advantage and a shorter life for your business. I think it also comes down to personality, some people would prefer quick profits others would prefer build something they are proud of for the long term.

    Is that the kind of response you are looking for?
     
  5. PaulPinnacle

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    I think this is where we differ and rather than it being a difference of opinion, it's more a question of semantics.

    I can't think of a single situation where a business (I'm generalising slightly to exclude certain operations, such as companies seeking to improve the environment etc., or certain business owners who are choosing self employment as a lifestyle choice rather than for financial reward, but as these are the exception rather than the rule they would need to be addressed separately) would seek to achieve competitive advantage where the end goal isn't to maximise profits. Again, potential for debate in terms of people suggesting that they're seeking to achieve 'risk mitigation', 'sustainability', 'customer satisfaction', etc. etc., but again, I'd suggest that each of these is being addressed for the singular aim of maximising profits. Profits are the raison d'etre of the vast majority of businesses (despite what many say from time to time in the aim of good PR, again, done so with the aim of maximising profits ;)).

    Personally, in the example above, I'd suggest that seeking to achieve short term profits is simply poor management and short sightedness by the business concerned. If seeking to 'maximise profits', a long term view would have to be adopted. In the case where improved competitive advantage will yield more profits in the long term, again, the goal here is to maximise the profits. Achieving the competitive advantage is just a means to an end to achieve those profits.

    (Happy to admit that this is an area I've never spent much time considering and am very much open to correction. I'd love to come across something that gives me a new insight and can change my mind on the topic.)
     
  6. Fergal

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    Sorry Paul, no insight from me I'm afraid. I agree with you.
     
  7. Kay

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    Welcome to Business Advice Forum, Talltom. :) I would say they boiled down to one and the same thing too. If you're trying to judge what phrase people respond to more, my choice would be increase competitive advantage. That choice is an emotional one because maximise your profits sounds too money-grabbing for my tastes and pushy sales pitches/landing pages completely put me off products.
     
  8. GekiDan

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    I agree with the posts above from Paul, Kay and Fergal. Basically, the selection is the same, one way or another.
    Choosing one will give you the other one as a result. It will just depend on you on how long will you achieve it.
     
  9. talltom

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    Thanks everyone for taking the time to think through this issue that I created. Here's my motives, and explanations for asking the question.

    I agree that, in the end, the results of maximizing profits and achieving a competitive advantage are usually the same. What's different is the processes behind the two concepts.

    Maximinzing profits, is all about 'buy low, sell high' and achieving market superiority simply on the basis of price and profitability.

    Achieving a competitive advantage, however, has many more (possibly) components. Product/Service positioning and branding in the market (my product is better than theirs because...). Promotional strategy, product distribution, availability,and logistics as well as the pricing strategy are all components of achieving a competitive advantage.

    My reason for asking the question, was to get some feedback for how well business people understood the difference between the two, and the 'emotional triggers' perhaps (that was a great observation about the emotional component btw).

    I've been pretty busy over the past few years buildinng an online database that I'm preparing to launch in the near future. My reason for asking the original question, was to get a feel for how to promote the product - "maximizing profit" or "achieving a competitive advantage".

    Good discussion everyone. Thanks
    Talltom
     
  10. PaulPinnacle

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    This is where we disagree.

    Maximising profits, in my mind (again, it comes down to context and I'll admit you know more about the 'technical' side of it if it's something you're studying), is about far more than simply increasing margin per sale (think Ryanair, low margin high volume sales) or competing in a market on price point alone (think of the various brands that can charge a high premium based on their 'name' alone [which is a competitive advantage, built up intentionally to assist in maximising profits]). Excellent customer service, effective branding, long term sustainability, risk management and mitigation, etc. and how to achieve and leverage a competitive advantage are all part of an effective (long term) profit maximization strategy.

    (Given my own background as an engineer and project manager, where mathematical modelling, data analysis and risk management are core activities but 'business' would be very much a tangential area, happy to admit my own view on things may not be in line with those of the 'average joe' so don't let my comments overly skew your results)

    Great discussion though, thanks for raising it Tom. Hopefully the results and inputs (apologies for me dominating them a little) give you the kind of insights you were hoping for.
     
  11. Fergal

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    There are a few members here who are great copywriters, if you would like to get feedback on some text please feel free to start a new thread in our Sales & Marketing + Online Promotion & SEO forum. You could also consider doing some split testing on your ads, to determine which phrase gets you the most click throughts and the highest conversions. Again this is something we can help you with, if you have any questions.

    Good luck with it.
     

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