Mal's musings: Bring on the competition!
The marketing team is running around in panic, projections are being reviewed, and sales force strategy abandoned. Why?
By on Aug 9, 2010The marketing team is running around in panic, projections are being reviewed, and sales force strategy abandoned. Why?
A new competitor is entering our market next week.
Apparently, their product is better than ours and cheaper.
Does the entry of a new competitor justify panic? No!
Most companies are looking for blue ocean strategies, a world where there are no competitors because we have identified a unique need.
Nice. Meanwhile, in the real world, competition is not such a bad thing, is it?
There are benefits to an orange ocean.
We panic about competition when the value we are currently delivering to customers is questionable.
Even if a new competitor forces some price erosion, it is worth considering benefits they can also bring with their entry.
A group of competitors can galvanize a market as they share the cost of establishing a market that can serve all they players in it.
In the majority of markets, the market for non-users is bigger than the market for already converted users.
Nonetheless, organizations tend to focus their efforts on the user market.
The diffusion of innovation is accelerated by the activities of numerous competitors.
Most of the concern about competition has its roots in two areas: insecurity and austerity mentality.
Insecure companies are paranoid about competition and, in some cases, rightly so.
After all, if you are not delivering value to your customers then you have every reason to worry.
If you have not taken the time to segment the market in order to understand the needs you aim to meet, there is cause for concern.
There is only one reason to worry, and that should be the customer. In the end, the answer is always with the customer.
Total commitment to customer service leaves no room for competitor paranoia.
Organizations that are delighting customers welcome competition; often, it emphasizes the value they deliver to their customers when the inevitable comparison is made.
The market is huge, the market is unlimited, but when we think in product silos we become restricted and huge opportunities shrink.
Customers do not want or need products; they only want solutions.
In most cases, there is a gap between current solutions and perfect solutions to the customer needs.
This is the area that deserves our focus and attention.
Consider the gaming market. The Nintendo Wii competes with Playstation, but in essence both competitors and others still enjoy great success because they are growing their market.
The secret is segmentation and focus.
To the extent that needs vary, the opportunity is to accommodate numerous competitors and yet still grow the market.
If you consider the most successful products and markets in our sector, you will notice in most cases the key players often benefited from the entrance of competitors. Why?
To convince the market of an approach to solving a problem requires effort and resources.
To this end, when three or four companies are pushing this message it is much more likely to establish a market that can serve numerous competitors.
We should not forget that sales is not a guaranteed marker for profits, so different organizations can successfully pursue differing goals and strategies in the same market.
A blue ocean is not a necessity for prosperity.