Choose a POint of Sale provider that aligns with your own business’ values
If you’re a small business owner, you’ll know that putting together a strong business plan is essential when embarking upon a new venture. Having identified a demand for your product or service in the market, a good business plan can assist you in understanding your competitors and plotting a strategy for competitive advantage.
After analysing your competitive market, where is your business positioned?
Cost leadership
Can you offer your customers the lowest cost option of your product/service, compared to your industry’s average? Businesses that have a cost leadership focus tend to be larger, operating on mass with the potential benefit of preferential supply costs and/or self-owned technology/supplies.
The pros:
With below industry pricing, cost leaders tend to dominate market share, reaching a wider audience and sometimes breaking into new markets.
The cons:
There is always the potential for a competitor to undercut your product/service, meaning you may be pressured into reducing your pricing further. To be profitable, the business is likely to rely on high sales volume. When positioning your business as ‘low-cost,’ it can also be perceived as low-quality.
Differentiation
Businesses that choose to pursue a differentiation strategy focus on one or more factors that their target customer deems important. Their product/service is then positioned to fulfil these customer’s needs. This normally means that a higher price point can be achieved.
The pros:
By offering a premium product/service, businesses focusing on a differentiation strategy can usually charge higher prices. By standing out from their competitors, they can gain increased brand loyalty and build stronger relationships with their customers.
The cons:
Customers who are price sensitive may instantly overlook your product/service. It can be hard to communicate brand differentiation. You may need to use paid resources to communicate this message to your target market, leading to higher customer attribution costs. Customers may not perceive what you have identified as a valuable difference as valuable to them or valuable enough to pay a higher price.
Focus
Can your market be further segmented to create a more niche customer target? Businesses may choose to narrow their market reach by focusing on a smaller target customer base. Like differentiation, a focus strategy can achieve a more premium price point, with products/services that are able to fulfil the unique needs of a niche customer base.
The pros:
With a focus strategy, businesses may also benefit from lower customer attribution costs, and a better understanding of their market’s needs, leading to stronger customer relationships.
The cons:
It is possible that competitors offering the same or similar niche product/service will enter the market limiting the opportunity to win or retain customers. Furthermore, if these competitors are able to offer lower prices or better fulfil customer needs then it makes competing hard. A small customer base can mean that there is little room for business growth, however, expanding out into alternative markets risks potentially forfeiting the uniqueness that first attracted your niche customers.
But what does this have to do with point of sale?
Like most industries, the point of sale market is filled with a multitude of companies competing for their share. As a small business it can be hard to decide what point of sale system is best for you.
Most POS companies will showcase a list of key features on their website. As a small business, perhaps even newly established, it can be overwhelming and hard to distinguish what is right for you.
Any decent point of sale supplier will be able to offer you a system that will allow you to operate your small business effectively. But choosing the right POS company is the hard bit!
Choosing a point of sale company that aligns with, supports and complements your business is key. You need to think back to when you were considering the strategy you would take to compete in your chosen market. What is it that you value most?
Do you have a niche business that requires unique features or support to assist you in running your operation? Perhaps you are a start-up company with limited funds and resources? Or do you prioritise quality over cost?
At EPOS Systems we see the value of exceptional customer service. We know that running a small business is stressful and having a reliable support team on hand is invaluable. Understanding this is how we have continued to thrive and grow in a competitive point of sale market for over 40 years.
Like you, we are a small business. Small in size, but big on support. Our team of seven share 112 years of combined EPOS experience. We are passionate about POS!
If you are looking for the best point of sale system for your small business, why not give us a call? Our dedicated team of EPOS Experts will be delighted to provide you with a personalised point of sale solution.
Source:
https://www.ifm.eng.cam.ac.uk/research/dstools/porters-generic-competitive-strategies/