Virtually all businesses (98 percent) participating in a recent survey are guided by a competitive strategy.1 The amount of time spent on competitive strategy increases with business size, but overall, less than half of businesses are spending significant time on competitive strategy. Here are some additional key findings about how midsize businesses are prioritizing (and paying for) competitive strategy efforts.
- Several industries stood out as doing a significant amount of competitive strategy work, including technology hardware and software, retailing and automotive.
- Quality is a core priority for approximately two-thirds of businesses; innovation and focus/targeting a niche are other common components of businesses’s competitive strategies.
- Companies earning $25 million or more each year in revenue are most often focused on superior products and services (55 percent).
- Businesses have fulfilled their competitive strategy by developing deep customer relationships and creating superior products and services.
- 37 percent of midsize businesses are not certain their lead bank is aware of their competitive strategy.
- Just 54 percent of midsize businesses say their lead bank has contacted them proactively to discuss their competitive strategy.
- Midsize businesses plan to reach out for help with competitive strategy in the future, but banks are currently an untapped resource.
- And yet, of those businesses earning $25 million or more in annual revenue that spoke with their bank about competitive strategy, 63 percent found it extremely helpful, while 54 percent said it was extremely impactful on their performance in the marketplace.
- Businesses feel banks can best support their competitive strategy by assisting with access to capital, which may be used for fixed-asset purchases or leases, working capital, acquisition or product R&D financing.
What’s the ROI of Competitive Strategy?
Investing in an ongoing competitive strategy is a major step for businesses at any level, but companies that make the effort see the payoff.
More than one-third of midsize businesses report dedicating significant time to competitive strategy, and companies with higher revenues and shorter tenure are the most likely to feel it’s time well-spent.1
Compared to their peers, midsize businesses doing a significant amount of competitive strategy work feel stronger in the market and are better connected to their financial partners:
- 98 percent believe they have a strategic advantage over the competition
- 73 percent say their lead bank has knowledge of their competitive strategy
- 66 percent have reached out to their lead bank about supporting their strategy
A strong competitive strategy is the advantage your business needs to begin widening the gap between itself and everyone else. The first step is getting your full team on board: Whether your focus is differentiation, or a combined strategy of quality and purpose, every person at your company needs to know the strategy and the game plan for getting it done.
With your team on board, look to external partners, too. Including your banker in strategy conversations can improve the quality of your partnership and better your odds of finding creative financial solutions to support your company’s strategic goals.
Whether your business could use consultation or support around traditional financing options, access to capital to invest in fixed assets or R&D, assistance with strategic buyouts or with streamlining cash flow, SunTrust can help.