Don’t Copy—Create: Differentiation and Cost Leadership in Action

Hard - Requires significant effort Recommended

Every sustainable success story can be traced back to one sharpened principle: winning means being unmistakably different or unmatchably efficient. In business, these approaches are called differentiation and cost leadership, and while the labels sound academic, the logic applies everywhere—school projects, sports, art, or even managing your household.

Consider two local sandwich shops. One focuses on offering the cheapest sandwiches in town, using bulk ingredients and streamlined operations to keep costs rock bottom. The other curates unusual flavors and artisan breads, charging extra but delivering an experience customers can’t get anywhere else. Both are viable, but the key is that each picked one lane and mastered it. Trying to be everything to everyone just makes you forgettable—or unprofitable, with middling value to users.

In behavioral terms, trying to do both invites split focus and eventually mediocrity. Competitive advantage, as Michael Porter defines it, comes from either doing what others can’t (differentiation) or doing what others do at a lower cost (cost leadership)—but not both. Smart strategy clarifies your lane and invests all available energy into widening the gap between you and the next-best choice.

If you want to stand out (or streamline), list what your audience actually values from you—maybe it’s speed, quality, personality, or price. Then decide: will you amp up that uniqueness, making it so good people will pay more, or will you work to deliver the essentials at a price no one can match? Pick one lever today, and reshape your next week around it. Don’t try to blend the two; disciplined focus will get you further.

What You'll Achieve

Gain lasting competitive advantage by choosing between becoming distinctively valuable or remarkably efficient, resulting in greater customer loyalty or industry-leading cost savings.

Define and Amplify Your Unique Value Equation

1

List what makes your product, service, or skills ‘different’ in the eyes of your users.

Do this from the user's or customer's point of view—not what you think is unique, but what they experience as valuable.

2

Identify where you can either lower costs (for cost leadership) or justify a higher price (for differentiation).

Test whether your difference justifies charging more or creates enough efficiency to charge less.

3

Choose one lever to strengthen right now.

Don’t try to do both at once; pick either lowering cost (standardizing, cutting unneeded features) or deepening what makes you stand out (innovation, design, user experience).

Reflection Questions

  • What do my users/clients/customers truly notice or care about most?
  • Am I spreading myself thin by trying to be both the cheapest and the most special?
  • Which strategy feels more energizing and realistic to invest in today?

Personalization Tips

  • A college applicant can stand out by highlighting a unique combination—like science skills and community storytelling—in their essay, not just high grades.
  • A bakery might justify charging $1 more by showcasing locally-sourced unique flavors, not just bigger portions.
  • A social media freelancer could systematize all account management processes to reduce cost and charge clients below market rates.
Playing to Win: How Strategy Really Works
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Playing to Win: How Strategy Really Works

A.G. Lafley
Insight 5 of 8

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