Sustainable Competitive Advantage in Dentistry - Part 4
A five part series focusing on positioning yourself and your
practice in an ever increasingly competitive environment.
By Dr David Penn
Niche Focus
Practices and corporates that use Focus strategies concentrate on particular niche markets and, by understanding the dynamics of that realm and the specific needs of patients within it, develop uniquely low cost or highly specialised treatments, products and services for the patient cohort.
As they serve the needs in their market uniquely well, these practices tend to build strong brand loyalty amongst their patients (and referring dentists in specialty fields). This makes their particular position in the market segment more difficult to compete with and generally raise the barriers to entry significantly. We call this customer or patient “stickiness” and it adds massive value to the long term sustainability and commercial worth of your practice.
As with broader market strategies, it is still essential initially to decide whether you will pursue Cost Leadership or Differentiation once you have selected a Focus strategy as your main approach.
Focus is not normally enough on its own. (eg cheapest aligner system versus most effective or becoming an implant specialist). This is a critical decision that needs a great deal of research and due diligence.
As they serve the needs in their market uniquely well, these practices tend to build strong brand loyalty amongst their patients (and referring dentists in specialty fields). This makes their particular position in the market segment more difficult to compete with and generally raise the barriers to entry significantly. We call this customer or patient “stickiness” and it adds massive value to the long term sustainability and commercial worth of your practice.
As with broader market strategies, it is still essential initially to decide whether you will pursue Cost Leadership or Differentiation once you have selected a Focus strategy as your main approach.
Focus is not normally enough on its own. (eg cheapest aligner system versus most effective or becoming an implant specialist). This is a critical decision that needs a great deal of research and due diligence.
Finding that niche is the absolute key.
Whether you use a Cost Focus or Differentiation Focus, the key to making a success of a generic Focus strategy is to ensure that you are adding something extra as a result of serving only that market niche.
The "delta x" that you add for instance, may contribute to reducing costs and materials (perhaps through your knowledge of specialist suppliers) whilst increasing differentiation (through your deep understanding of patient’s needs) with technology, state of the art treatments and services or a combination of both.
Finding this “delta x” is one of the most difficult goals in dentistry and is rarely found in an “Eureka” moment and is most commonly the result of collisions of hunches that may have been laying dormant.
Niche practices are challenging to create and to maintain but offer superior returns and sustainability if engineered properly.
So the secret here is quite simple:
Be different or
Be cheaper or
Be niche
Which one is for you?Dr David Penn
