KINGSTON, Jamaica – Keera Walters, Assistant Manager for the Jamaica Business Development Corporation (JBDC) Business Advisory Services Department, says as global giants dominate the market space, local Micro, Small & Medium-sized Enterprises (MSMEs) can only achieve market advantage through serious strategic planning. Walters was speaking at a recent JBDC Virtual Biz Zone webinar, while presenting on Niche Versus Mass: Knowing What is Right for your Business.
According to the Statistical Institute of Jamaica (STATIN), Jamaica generated export earnings of just over US$1.9 billion, between January and December 2022. This represents a 28.4% increase over the US$1.48 billion recorded for the corresponding period in 2021. With increased opportunities for export, more local entrepreneurs seek to gain international market access. Walters is concerned though that after market access, some MSMEs lack the strategy to survive the competition from big brands. This she says can only be prevented by the strategic plan.
The business development expert says, “Doing business without strategy is like playing entrepreneurship. The strategic plan will set the tone for the next 3-5 years, and outputs of the business are driven by that high level strategy.”
She added that, “The business level strategy focuses on how you compete effectively. This is where you look at how you are going to gain competitive advantage and for any business to be successful, they must develop a competitive advantage.”
The competitive advantage refers to the factors that allow a business to produce goods or services more efficiently than its competitors. With this, the productive entity can generate more sales or superior margins compared to its market rivals. Competitive advantages are attributed to a variety of factors including cost structure, branding, intellectual property, the quality of the product offerings and customer service.
Walters spoke on the approaches to gaining a competitive advantage, “Businesses can employ the cost leadership strategy. This is where they produce high volumes to sell at low unit cost. There is also the differentiation strategy where businesses aim to differentiate their products from competitors by emphasising their value proposition. And then there Is the hybrid strategy. This involves trying to target a unique market segment with specific preferences and needs.”
Continuing, she pointed out that Niche and Mass are two different types of strategies that businesses can use to target their customers and gain a competitive advantage. A Niche Strategy focuses on a specific segment of the market that has unique needs, preferences or characteristics that are not served by mainstream competitors. A Mass Strategy aims to appeal to a large and diverse group of customers by offering a standardised product or service that meets the common needs of the market.
“The choice between niche and mass strategy depends on several factors which include size and growth potential of the market, level of competition/the degree of differentiation, cost structure, and organisational capabilities,” she explained.
Walters wants small businesses in niche markets to develop a Unique Selling Proposition (USP). “What makes your product or service different from the competition? Your USP should be clear and compelling, and it should be communicated in all your marketing materials,” she said.
For small businesses in mass markets, Walters says they must develop a strong brand identity. “This is what sets you apart from competitors. Make sure your brand is clearly defined and communicated in all your marketing material,” she added.
The JBDC is the premiere business development agency driving entrepreneurial success in the local MSME space. Entrepreneurs can look out for more of JBDC’s Virtual Biz Zone webinars in January 2024. The JBDC is an agency under the Ministry of Industry, Investment and Commerce (MIIC).
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