Personnel differentiation


Companies can gain a strong competitive advantage through having better-trained people. Singapore Airlines enjoys an excellent reputation in large part because of its flight attendants.

McDonald’s people are courteous, IBM people are professional, and Disney people are up beat. The sales forces of such companies as General Electric, Cisco, Frito-Lay, Northwestern Mutual Life, and Pfizer enjoy an excellent reputation. Better–trained personnel exhibit six characteristics >>


They possess the required skills and knowledge. They are courteous, friendly, respectful, and considerate with credibility. They are trustworthy, reliable and perform the service consistently and accurately.


They respond quickly to customers’ requests and problems;

They make an effort to understand the customer and communicate clearly. Retailers, in particular, are likely to use their front-line employees as a means of differentiating and positioning their brand. This is certainly true of large chain bookstores like Barnes & Noble and Borders.

Barnes & Noble and Borders superstores certainly look eerily similar: Large comfy chairs, mahogany bookshelves, tasteful décor, and the scent of fresh–brewed coffee. However, the stores have very different business philosophies and both use their employee as “missionaries� for widely differently inventory and business models. Borders, which has 32,000 employees and 445 US superstores, focuses on offering the widest assortment of titles and tailoring its inventory to each store’s location. Barnes & Noble has 40,000 employees in 800 US stores attracts customers with low prices and the most popular books. While both companies say that “passion� is the most important quality in their booksellers, that passion is expressed in different in different ways. Barnes & Noble hires with a passion for customer service and a general love of books. They are clean cut and wear collared shirts. Putting the book in the customer’s hand and fast cashiering are their mandates. Borders employers are likely to be tattooed or have multiple body piercing. The company prides itself on the diversity of its employees and hires people who radiate excitement about particular books and music, relying on them to suggest topics and titles rather than simply find a book for customers.

Channel Differentiation

Companies can achieve competitive advantage through the way they design their distribution channels’ coverage, expertise, and performance. Caterpillar’s success in the construction equipment industry is based partly on superior channel development. Its dealers are found in more locations than competitors’ dealers, and they are typically better trained and perform more reliably. Dell in computers and Avon in cosmetics distinguish themselves by developing and managing high-quality direct-marketing channels. Back in 1946, pet food was cheap, not too nutritious, and sold exclusively in supermarkets and the occasional feed store: Dayton, Ohio-based stores found success selling premium pet food through regional veterinarians, breeders, and per stores.

Another case>>

Apollo Group Inc., has turned conventional higher education on its head by launching an online university geared towards the neglected market of working adults. University of Phoenix Online is one of Apollo’s most successful ventures, with 50,000 students, and in the past year UOP enrollment surged by 70 percent. In addition to differentiating based on delivering education through a different channel—online classes—Apollo charges only $10,000 for yearly tuition, 55 percent of what a typical private college charges.