Identifying Your Competitive Advantage

Identifying Your Competitive Advantage

Cowboy roping
What is it about your product, skills, reputation, business structure, location or service that sets you apart from others? Photo credit Troy Walz.

Livestock producers can enhance success by identifying and exploiting their competitive advantage in relation to their competition. What is special or unique about the product you produce, your skills, background, reputation, business structure, location or service that sets you apart from others?  What gives you a “leg up” on the competition?

Are you having a hard time identifying your potential competitive advantages? Consider asking questions that can help you identify what they might be. This process can reveal where there may be an opportunity that hasn’t been considered or the recognition of a new way to further develop a resource that may help you grow a competitive advantage.  If you find yourself in a bit of a mental struggle to perceive what your competitive advantage might be, consider asking yourself questions around these five “P” categories: place, passion, problem, people and position.

Place – What is it about your place, your location, or your climate as it relates to resources that is unique?  There is a saying that “there are three things that matter in valuing real estate: location, location and location.” What benefits does your location provide that most others don’t have? How can your location be leveraged to your advantage?  What could these advantages be for beef production as well as other potential enterprises?

In thinking about cattle production, the competitive advantage of a cow as compared to pigs or chickens is their ability to harvest forage and effectively convert that into a high quality, desirable protein. What is the quality and quantity of the forage your location grows? What is the market value of that forage throughout the year? What class of cattle best matches the primary forage resource available? Could other ruminants such as sheep and goats consume underutilized or problematic forage resources as a complement to cattle?

What are other enterprises that could utilize available resources and complement livestock production? For example, the seclusion of a ranch location might be seen as a disadvantage.  However, there is a segment of the population that is longing for experiences in isolated areas away from others. How could what uniquely characterize your ranch’s location and natural resources be valued and marketed to others?

Passion – What passions do you have as it relates to natural resource management or livestock production that differentiates you from others? Do you have a unique combination of skills or experiences?  How can you harness and develop yourself to be a point of leverage that can enhance business success?  What are you enthusiastic about that other people value and are willing to pay for? How can your skills and passion in this area be further developed and effectively marketed?

Many ranchers are passionate about caring for the land. Increasingly as land transitions to the next generation, absentee landowners are looking for competent, committed people to steward land resources. Those who have skills and a proven track record for excellent land management will likely have opportunities to steward land for others.   

Problem – What problems could you solve that would make what you produce or the service you provide unique and highly desirable? People are often willing to pay generously to have a “problem” solved. What product or service could you deliver that would set you apart as compared to what others do? When something you are passionate about can also be used to solve a problem for someone else, exciting opportunities often begin to appear.

For example, as the average age of ranchers continues to increase, the demand to have someone else custom calve heifers or cows appears to be increasing as well.  Do you enjoy calving heifers or cows? Could you leverage your labor, facilities and equipment to provide a service to custom calve for someone else?

People – How are your people skills? How would you rate your communication, motivation, conflict resolution and leadership of others? What are you naturally good at as it relates to people skills? What areas do you need to grow in to enhance or develop a competitive advantage?

Who are the people you currently serve or could serve with the product or service you provide?  What do they want?  Is there a customer desire that you haven’t considered?  What could be the financial advantage to you if that desire could be met? Are there potential customers outside of the people who currently purchase the products you produce or service you provide that you could serve also? How can you connect with them and develop a business relationship?

Position – What is your position in life? Are you early in your career with the willingness to be nimble and can quickly adjust to an opportunity? Do you readily have the availability of labor and energy to give to a prospect?  Or are you established in your business with a standing reputation and a strong financial position that you can leverage to weather challenging financial times and take advantage of opportunities? Recognizing your position in life and the strengths and weakness of that position will help you to discern potential competitive advantages.

In exploring the competitive advantage of you operation, consider involving other members of your family, employees and trusted advisors in this discussion as well.  Get their perspective on what they see as being a current or possible competitive advantages.  Also consider interacting with people who are successful at business, but outside of agriculture to give you input as to potential competitive advantages.  A fresh perspective from an outside source could open your eyes to seeing a new opportunity that you hadn’t considered before.

Commodity beef production on farms and ranches has historically been a highly competitive, low margin business.  However, within that business arena, there are often opportunities to develop enterprises that serve others and complement beef production that producers can utilize to their advantage. Identifying what your competitive advantage is, or what it could be, can bring focus to where efforts and investments should be made to grow and develop the business.


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