Task 21 is where we’ll dig deep into your Unique Selling Proposition, or better known as a USP.
In Task 12 we touched on the themes of innovation, distinction, and simply being creative in setting yourself apart from the pack.
Your USP will be your center of gravity in achieving that. If done right, a USP should be the first thought that pops into a customer’s mind when they think of your brand.
Crafting a compelling USP starts externally by understanding your industry, and transitions internally into understanding how you fit into the landscape that your competitors have drawn.
Porter’s 5 forces is a great way to start by turning the lens outwards. Here’s an example of Porter’s 5 Forces applied to the US wine industry. The 5 forces allow you to deconstruct an industry by its most critical aspects.
Start with Barriers to Entry - How easy is it to get a foothold in this industry or market? How much would it cost, and how tightly is your sector regulated?
Substitutes. What is the likelihood that your customer would forego your solution for another alternative? Why would they do so - Is it because of cost, or quality, or something else?
Look at Buyer Power and how easy it is for buyers to drive the prices down. What does the market look like and how is the scale tilted?
Supplier power. This is determined by how easy it is for your suppliers to increase their prices. How many potential suppliers do you have?
Finally, Competitive Rivalry will allow you to assess how saturated the market is and begin your first steps in understanding the competitive landscape. Ideally, through the 5 forces you’ll have a better understanding of the gaps in the industry. It is here where your focus should shift as it is precisely these gaps that your USP can hope to fill.
Reduce, eliminate, raise, and create is a simple matrix-tool that drives companies to focus simultaneously on four pillars of differentiation.
It destroys the trade-off between differentiation and low-cost in creating a new value curve. Ultimately you’ll be able to determine if there is indeed a path to a blue ocean market, and if not, be able to distill your learnings into what will distinguish you in a red ocean.
Yellowtail is a great example of a company breaking into a red ocean market, but distinguishing themselves with a USP that filled the gaps of the industry. Run your idea through the matrix and distill the results into actionable improvements, rooted in competitive factors.
The result is a USP that draws a bold line between you, and your competitors.
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