Positioning against the right competitors is important. Deeply understanding the strengths and weaknesses of those competitors is necessary for determining not only why customers choose you today, but how you can continue to win far into the future.
While determining why you win today may be as easy as asking customers, determining your competitive strategy takes careful analysis and unflinching commitment.
The classic framework for competitive strategy was published by Michael Porter in 1980. He introduced three generic strategies: cost leadership, differentiation, and focus. Porter argued that it was critical for a business to choose one, or else they would get caught in the inherent tradeoffs between the different strategies.
In their 1995 book The Discipline of Market Leaders, Michael Treacy and Fred Wiersema took Porter’s model and described the three strategies using language a bit easier for managers to understand and apply.
Answering the question “why do customers choose you” needs to be answered not only for today, but with a long term commitment to a sustainable winning strategy.