Make the Competition Irrelevant

Make the Competition Irrelevant

It’s summer in the northern hemisphere and our thoughts turn to the beach. With great anticipation of a lovely day, we pack our beach bags, prepare our picnic and herd our family and friends into the car. What would we do if when we got to the beach the water was red, turbulent and teeming with people? We would know immediately that something is not right, wondering at the folly of people who swim in such mess. With haste, we would depart to find a deserted beach of travelogue quality, where the water is clear and blue with nary a soul in sight.

Traditionally, one of the first steps in strategic planning is to analyse the competition. There are many models for this e.g. Porter’s Five Forces or BCG Matrix that help us understand how industries are structured, who the players are and how firms compete. At the conclusion of the competitive analysis the CEO and his/her team wonder: “Now that we understand the competition, what do we do?”

Typically, they decide to copy, find their competitors’ weaknesses and exploit those or exploit a niche that they are not focused on. But are any of these the best way to build an unassailable competitive position? Here’s the thing: what you see as the competitor’s strategy is a result of their past actions i.e. their historical choices. When you try to copy them, you are copying what you see today, which they began months or years before and in a different context. If they are smart, and of course they are, they are already in the throes of developing and implementing the “next big thing” – all while you are trying to figure out their “last big thing”. You are mired in cutthroat, bloody competition, barely able to swim. You are in a Red Ocean.

Unlike my example of the beach, where we would hightail ourselves out, we instead dive deeper, never thinking to step away and find the beautiful waters of an uncrowded Blue Ocean, where, according to Kim Chan and Renee Mauborgne, authors of “Blue Ocean Strategy” (www.blueoceanstrategy.com) we will find “uncontested market space where the competition is irrelevant.”

“Make the competition irrelevant.” What an amazing and indeed revolutionary approach to strategy! Many organizations have done this – Amazon, Apple, SouthWest Airlines, Jamaica Money Market Brokers to name but a few – all made their decision to get out of the bloody waters of the Red Ocean and instead find Blue Oceans of uncontested market space, massive customer value and profitability.

Here are some indicators that you might be flailing in a Red Ocean:

1. You spend inordinate amount of time studying and worrying about what your competitors are doing;
2. You search for niches that your competitors are ignoring;
3. You are building your strategy around your competitors’ weaknesses;
4. You are fighting for market share among the same group of customers as your competitors.

If any of the above sound like your approach to strategy, NOW might be a good time to start your search for Blue Oceans.

For similar blogs by Marguerite (click to view article):

• How Apple-ised is your business?
• Simplicity in your organization. It’s simpler than you think.

TAKE ONE ACTION

View this short video on Blue Ocean Strategy:

Now ask yourself: What would my business be like if we could create uncontested market space where the competition is irrelevant? Remember: others have done it and so can you.

Please contact Marguerite to learn more about how we can help you find your Blue Oceans – with ease, grace and joy of course!

INTERESTING LINKS

For those of us who believe in the value of “Joy at work”, this article reminds us that happiness is more than just perks. If your intention is simply to get more hours from your employees, then you are missing the mark.
– click to view article

The discussion about “minimum wage” is about “living wage” in some quarters. Here a very courageous CEO stopped talking and just did it – moving the starting salary of all his employees to $70,000 per annum, taking a significant pay cut. Projections are that his profits will decline, but frankly I am willing to bet that they will increase.
– click to view article