Strategy: Rethinking Competition
Rethinking competition…We all know who the competition is. Well, we really don’t. Or at least we don’t all agree even when setting the context. I often run an exercise where members of a board are asked to write down their firm’s top 5 competitors. The top 5 competitors exercise often returns a list of eight or twelve because most organizations don’t purposefully reinforce their targets.
And as competition remains vague in many corners, it is also changing and becoming more complex. We are no longer constrained by commercial competitors who are trying to take away market share. Commercial software companies face competition from free software that approximates an experience at zero cost to the end-user. Some commercial software companies give away some software in order to compete with this goodwill market. But that is close to traditional in that a set of features or price points compete for a limited resource, in most cases money. The commercial companies continue to sell core products because the free competitive software is often a bit less polished, and is usually well behind in features, especially those features that build on a suite of capabilities, as you would find with Microsoft Office, its communications products and SharePoint. Any piece of those has strong competitors, as a suite of integrated capabilities, no one comes close. Free software from commercial firms enhances their value proposition and shores up their lock on the market because it doesn’t work with anything but their tools.
Do we really need to compete?
Nope. Adobe dominates in a market filled with free offerings because it is the category leader for graphics software. If everybody had the money everybody would buy Adobe. As cloud models evolve, Adobe makes it increasingly easy to buy into their ecosystem.
But competition isn’t just about things or stuff or bits anymore. It is also about attention. It is about time. People are time and attention-starved, which is why experiences have become such a big competitive tool. Experiences need to be unique in order to gain the attention of the individual or have them spend their time. Volunteer organizations compete for time and attention. After a disaster Americans generously give, more than those of any other nation. But we don’t stay focused on a disaster for long. As coverage and engagement with the event wane over time—because the media reflects and feeds alternative points of focus—we shift our attention to new things to worry about, cheer about and engage with push the disaster out of day-to-day attention.
Experiences and attention are key to the future of education. Learning needs to be an experience that engages attention and provides a motivation to spend time. I hear teenagers all of the time, with tons of reading and mathematics homework looming over them complain not that they are overwhelmed, but that they are bored.
Rethinking Competition: Developing a real strategy
It isn’t strategy to say that the customer doesn’t get it and to continue to cater to those that do (well, that is a strategy, but a losing one—but it may create a momentary niche)—a better strategy is to learn from customers and create products and services that meet their needs, even if your own experiences or needs don’t reflect the changing market. Strong companies learn and adapt, and most of those that do, start with listening, observing and synthesizing. No firm really knows, and those who claim they do, really don’t, they are just lucky occasionally, looking prescient while their luck holds.
The best strategy is to do something exceedingly well, so well that there really isn’t a meaningful competitive player. That the solution proves unique, efficient and meaningful so that no business, no consumer, need to look elsewhere for a better solution. Differentiation in the design of the business in the market, in the products and in the processes that support.
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