Most CEO business owners completely misunderstand the point of market differentiation. They think that being different in a marketplace means doing what your competitors do, but better.

You see this a lot in the computer industry. One company has a computer that has 1 gigabyte or RAM, with a 150 gigabyte hard drive. The next company offers a similar computer that has 1.5 gigabyte of RAM with a 200 gigabyte hard drive. It’s all about playing the game of one-up-manship with competitors.

Market differentiation does not mean more of the same.

It means being, well, different.

Not more of the same, but rather more of something entirely different.

The video above illustrates this point perfectly and shows how one company has generated $28 Billion in sales by selling products that are very different than their competitors – substantially worse in 3 key areas which enables them to be head and shoulders better than competitors in 2 other areas.

Remember: Compelling market differentiation requires SACRIFICE.

It is very difficult to have your product be dramatically superior to your competitor’s product in one key attribute, unless you’re willing to make your product substantially inferior in other attributes. The reason Ikea can deliver very style furniture extremely inexpensively is precisely because they deliberately make their products less durable and force you to install in yourself. Both decisions make it possible to invest in style and lower prices (while still maintaining healthy margins).

In a recession, most business owners obsess about what’s wrong with their market, customers, company, and life. The natural inclination is to focus on your problems and how to make them go away.

While this is certainly one approach, it must be balanced with the exact opposite — focusing on what’s still working.

What part of your business is gliding along effortlessly despite you ignoring it?

What type of customer is as loyal as ever?

Which product keeps selling no matter what you do (or don’t do)?

In short, what segments of your business are still working well. And what can you do to focus on that and do what’s working more deliberately.

In a declining market, with limited resources, the only way to win (and not just survive) is through very carefully chosen focus. Pick and choose your battles very wisely because you can’t find too many of them at the same time.

Here’s Part 2 of my commentary on the KFC word of mouth mega-hit promotion turned disaster. There are lessons in here on what to do and what NOT to do. Both are useful and applicable to any business.

Even in a recession, life goes on. Babies are still being born. Couples still fall in love. And they still have weddings.

Is the business of hosting weddings recession proof?  Or is it not?

Watch today’s episode of More Profits TV and find out for yourself. And discover the lesson behind today’s case study that you can apply to your business immediately.

My latest book The Recession-Proof Business is now available on Amazon.com and Barnes and Noble.

The book reveals the lessons from 1 and 2 person business that were started in the major recessions and depressions over the past 136 years that survived and grew to become Fortune 500 giants. Discover how companies like FedEx, Hewlett Packard, Walt Disney, Coors Brewing Company, Dominoes, and many other business survived their early years. You’ll find out the four things these recession winners shared in common and how you can apply the same lessons to your business.

You can get copies using these links:

• The Recession Proof Business by Victor Cheng (Amazon)
• The Recession Proof Business by Victor Cheng (Barnes & Noble)
• The Recession Proof Business by Victor Cheng (Get a free promotional copy from my website – if any are left)

There’s only one thing worse than being in crisis (an economic one or otherwise), and that’s to be in DENIAL that you’re in a crisis.

See my commentary on the labor contract negotiations the Boston Globe newspaper is having with one of their labor unions… and the hidden recession survival lesson that every business owner must pay attention to.