|Word Count: 1,444
Estimated Read Time: 6 min.
As the economy continues to languish due to the pandemic, it’s been harder for some companies to survive and thrive than others. In part, that’s because the pandemic has affected some industries more than others. Obviously, online retailers are faring better than brick and mortar stores. And the pharmaceutical industry is definitely doing better than the travel and hospitality industries. That said, some companies have pivoted and found ways to differentiate or reinvent themselves to meet the current challenge. But, regardless of how the economy is doing, there is always a need for companies to stand apart. Companies that have found a way to truly differentiate themselves in the marketplace will usually fare far better than those who are in fiercely competitive markets.
As any business owner can attest, competition can push companies to do better and be better, but fierce competition can also be crushing. While most companies have some competitors, some companies have more competition than others. In part, how they’ve managed to differentiate or reinvent themselves in the marketplace determines how well they do. A key part of staying in business long-term is finding a way to stand apart from others in the same space.
Any product or service can be differentiated or reinvented to be completely unique. Those who sell “widgets” may think that a commodity is ubiquitous and cannot be differentiated. That is just not true.
Take, for instance, coffee. Coffee comes from coffee beans that grow on small trees or shrubs. So coffee is coffee. A commodity. And, all coffee beans are basically the same. But that is absolutely not true. The first natural differentiator of coffee is geography. Coffees grown in different parts of the world taste different. But there are other factors as well. Indeed, while there are about 80 coffee companies that roast or distribute coffee worldwide, some coffee beans are more popular and/or more expensive than others. Even coffees from the same part of the world can be differentiated.
For example, at over $100 per pound, Hacienda El Roble is one of the world’s rarest coffees, with a yield of only 22 kg every year. It is produced in Colombia, though the exact location of the farm is unknown. What is known is that the coffee is grown with meticulous care and has floral notes with a hint of mango and peach. It can only be bought from a single roaster in Australia and the flavor profile is a closely guarded secret.
Even more rare and expensive is Ospina Gran Cafe Premier Grand Cru, which is known for its nutty aroma with elements of apricot and a chocolatey finish and priced at over $150 per pound. This Colombian coffee was first grown by two brothers in 1835. Today, the Ospina estate is managed by the fifth generation of the family and has evolved into a coffee-farming collective that includes the families of three Colombian presidents among others. The most exclusive variety of the Ospina coffees is Gran Cafe Premier Grand Cru, which is grown at a minimum altitude of 7,500 feet on the highlands of the Antiquoia province. Clearly, it is differentiated by location, flavor and exclusivity.
And then there is Juan Valdez® Café. It is much more affordable but very popular brand of premium Colombian coffee. What it lacks in exclusivity, it more than makes up for in brand recognition. Most people recognize the name Juan Valdez and it has become synonymous with quality coffee. Why? Since the creation of the Juan Valdez® character in 1959, the icon has represented and promoted Colombian coffee globally, positioning and differentiating it from other coffees. People who value good coffee know that all Juan Valdez® coffee beans are handpicked by Colombian growers and undergo rigorous quality control processes. By monitoring all stages of the production process and preparation methods, they assure that each cup of coffee has the best quality, aroma, and balanced acidity.
So even something as ubiquitous as a commodity like a coffee bean can be differentiated. And this is not just about good branding, although branding and marketing helps. It means actually differentiating in some meaningful way. Without exception, every product or service can be differentiated or reinvented to stand out.
Reinventing for Differentiation
The same is true for manufactured products, services and even experiences. They can all be differentiated. Indeed, even something with such a distinct profile as a circus can be reinvented and made to stand out from other circuses. Case in point: Cirque du Soleil. To understand the Cirque du Soleil concept, it is important to look at the history of “circus.” While this type of entertainment has been around since ancient Roman times, the first circus as it is known today was designed in 1768 in England. It is believed that Calvary sergeant major Philip Astley, who served in the war of 1756, got the idea from horse riders who would perform stunts on their horses. Astley was an accomplished horse trainer and decided to open his riding school in 1768. He then went on to become a showman, combining equestrian acts with various performances including clowns, rope climbers, and jugglers. Of course, these types of performances can be traced back to early African civilizations who did acrobatics, ancient Chinese who juggled, and Greeks who practiced artistic rope climbing. But Astley brought all the acts together into a “circus.” So how would one differentiate clowns, animal acts, and jugglers? By reinventing the entire concept of what constitutes a circus.
Enter Cirque du Soleil. In 1984, a group of 20 Canadian street performers would do street shows that included juggling, singing, acrobatics and dancing with colorful costumes. As they increased in popularity, they opened a club to bring their street shows into a “circus” offering unusual live performances that could range from motorcycle feats to acrobatic dancing on ice. The acts were completely unique and amazing. Cirque du Soleil was born. One key difference of Cirque du Soleil from long-established circuses was that the shows had no animals or traditional clowns. This reduced the company’s cost base. Instead, they introduced live music and storytelling, emulating the world of theatre and emphasizing human physical skills. With this shift, Cirque du Soleil differentiated themselves, offering new elements that had never before been seen in the world of circus.
Since then, Cirque du Soleil shows have been performed in 450 cities and viewed by over 180 million customers. In 2019, the company employed 4,000 people, 1,300 of whom are artists from over 50 nations. Beside acrobatic shows, Cirque du Soleil offered theatrical shows at theme parks, multimedia productions, special events and immersive experiences in order to satisfy the demands of both individual and corporate customers. Cirque du Soleil thereby created a new market space comprised of adults and corporate clients, not just families.
For 35 years, Cirque du Soleil was very successful and highly profitable. However, unfortunately, Cirque du Soleil was forced to file for bankruptcy protection in June 2020 due to forced show closures brought by the Covid-19 pandemic. The company was unable to make a shift given that it relied entirely on revenue from live shows. An inability to translate their live show format to recorded streaming programming left the company with no way to generate revenue. In November 2020, the company was sold to a group of creditors led by Catalyst Capital Group.
In Business, Vive la Différence
Companies have been magnifying or spotlighting their differences as a way to stand out in a crowd for ages. In 1971 Gillette introduced the Trac II razor. Prior to that, every razor – including the safety razor King C. Gillette invented in 1901 – had a single blade. In Gillette’s case, they literally magnified the product, doubling the number of blades on one razor. Just as the safety razor had fundamentally transformed the world of shaving from a straight razors to safety razors, so too did adding a blade. Today, most razors have anywhere from three to five blades.
Smart companies have understood that they must differentiate or die. In doing so, companies have used differentiation as a way to even disrupt entire industries. Federal Express, United Parcel Service and Purolator Courier increased the speed at which packages would travel from point A to point B. This completely disrupted not only package delivery, but created waves in the retail world as well.
So how does a company go about making itself stand out from the crowd? Next week, we’ll look at how different industries such as insurance and air travel have tackled this very question, and consider the creative process for finding a niche upon which to stand apart. Stay tuned!
Quote of the Week
“America has believed that in differentiation, not in uniformity, lies the path of progress. It acted on this belief; it has advanced human happiness, and it has prospered.” Louis D. Brandeis
© 2021, Written by Keren Peters-Atkinson, CMO, Madison Commercial Real Estate Services. All rights reserved.