Companies create products or develop services to deliver to their clients. Many find a unique approach that gives them an advantage over their competition. Some of these ideas can be patented, but many cannot because they’re either an operational approach, or a unique blending of services. In either case, your unique advantage still needs to be protected.
When a company creates a value proposition that brings clients to their door, it may be the result of an operational twist, innovative thinking, or a new way of assembling components. Companies are very proud of what makes them unique and shout it from the rooftops. But that pride can disappear in a hurry when others take that idea and incorporate it into their own business model. When the unique becomes commonplace, the advantage is lost, along with profitability.
The father served primarily as a guiding light to the business, while the son led daily operations as the president. The son had reached out to help identify issues that were affecting their ongoing profitability. The family had two companies operating within their facility. One made stock models that were sold from a catalog, and the other produced structural prototypes of critical manufacturing components for major corporations.
The company producing stock models had been profitable, while the prototype company lost money consistently. More recently, the stock model company had experienced a drop in sales, and some customers of the prototyping business were not returning, leaving the company with idle manufacturing capacity.
The prototype company had made a major investment in metal 3D printing. When Fortune 50 companies approached them for prototypes, the company proudly showed off their manufacturing floor, with six machines costing over $500,000 each. For the company, this was a huge investment but their clients saw it as an instruction manual on how to produce the prototypes themselves. Soon, some customers set up their own prototype production.
The general ledger layout is generic in nature. The chart of accounts doesn’t reflect the unique nature of the products that the company sells, nor the specific cost elements of manufacturing. Some account allocations are miscoded, leaving zero balance accounts negative. The non-standard reporting creates minor issues with annual bank audits. The company has never created a budget for planning purposes.
The business climate is always changing, and companies are continually struggling to find unique ways of delivering quality products or services to their customers at a lower cost. In the process, they may make use of new technology, or find unique ways of creating products, or reducing costs through operational efficiencies. It is often that creative approach to business that is indeed their core competency.
But whatever the company is doing, there is a fine line between promoting your capabilities, and giving away the store. Ever expanding technology will make things more available to the greater business market. However, providing a window into the way you became successful may not only bring you new customers, but increased competition as well. Carefully identify your unique offering to the marketplace. If it can be easily replicated, then be cautious about publicizing the details. By keeping the details close, you may protect your position in the marketplace.
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