Transform Your Competitive Market Into An Uncontested Market
Many companies today face a very competitive market and are looking for a way to break out. When every competitor focuses on short-term tactics (i.e., special sale, drawing for a prize, etc.), the solution only lasts until one of the competitors comes up with a new tactic. Then, you have to dream up another short-term tactic.
This kind of competition is self-destructive. Each competitor is destroying their margins.
This kind of self-destructive competition is one of the problems W.Chen Kim and Ranee Mauborgo take on with their book, “Blue Ocean Strategy.” Their strategy is to create new demand by eliminating costs for features customers don’t value, and using that money to add features and benefits they do value. You should be able to add value at no additional cost.
Stop Benchmarketing The Competition
Too many companies focus their strategic thinking on the competition, which puts the competition, not the customer, at the core of their strategy. Stop benchmarking the competition and responding to their strategic moves because it means you look more like the competition.
Instead, put your strategic focus on the buyer and innovate new ways to deliver more value. Note: just because a competitor is doing something, doesn’t mean it of value to buyers.
For example, if your company is experiencing:
Competition is growing more intense.
Competition driving commoditization
One way to reimagine your market is to take the features each competitor competes on for the X-axis, and the value the customer puts on that feature on the Y-axis. Then draw a horizontal line for each competitor, and you will see the differences between competitors. You should be able to add value at no additional cost.
A quick example would be Cirque du Soleil. They combined traditional circus acts with modern acrobatics and then put then the performance in a theatre, which increased value, the price of the tickets, and significantly improved margins.
Focus On The Buyer
Put your strategic focus on the buyer and innovate new ways to deliver more value. Note: just because a competitor is doing something, doesn’t mean it is of value to buyers.
In summary, you have to re-think or re-frame how you approach the market. Then compare and contrast your offering with what competitors are offering (your x- and y-axis analysis). Then introduce the first product to a market with lots of pain -they will be more eager to buy. Then, finally, you expand your product offering to the bigger market and build revenues.
Think about these questions:
Which features of your product or service could you eliminate because the buyer does not value them?
How much would this reduce your costs?
What products or services could you add with those savings that would have value to the customer?
Which market segment can you enter to establish your base?
A quick example would be Cirque du Soleil. They combined traditional circus acts with modern acrobatics and put then in a theatre when they could increase the value and the price of the tickets.
If you know someone struggling in an overly competitive market, tell them about this post. Maybe it will help.
You might also be interested in our blog post, How Do You Know When It’s The Right Time To Scale?
You might also be interested in checking our website Harbor Capital Group, The Proven Secrets Of Successful Startups.