Small Businesses a trend in New Zealand

Did you know that New Zealand has close to 457,000 Small and Medium Sized Enterprises (SME) and four out of five small businesses fail within the first five years. So how do you define your business from the rest and ensure this doesn’t happen to you?

Did you know that New Zealand has close to 457,000 Small and Medium Sized Enterprises (SME) and four out of five small businesses fail within the first five years. So how do you define your business from the rest and ensure this doesn’t happen to you?

Here’s a quick activity that may help you.

In order for a business to be successful in a competitive market you need to have a Sustainable Competitive Advantage. The best way to test your business survival is to list your strengths and weaknesses’ under the following categories; Current financial position, Skills & Experience and Tangible/Intangible Resources.

Once you have identified your strengths you need to put these into the VRIO table as per below.

The VRIO framework is a great way to highlight the competitive advantage. You must ask the following about each strength. If at any stage the answer to these four questions is NO then do NOT continue, you will only have a source of sustainable competitive advantage if the answer is YES to all four questions.

Valuable - Is it valuable for the future of the business?
Rare - Are you the only business that has this strength?
Imitable - Is it costly or difficult to imitate?
Organisation - Is the business organised in a way that allows the strength to be exploited to its full potential?

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Remember, at the end of the day you cannot gain a competitive advantage without providing value to your customers!

Author: Jenna Gilbert