Making competitors irrelevant

Too much strategic focus is placed on competitors, when the focus should be on how to make competitors irrelevant.

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Categories can become a cesspool of competition, typically offering much more choice anxiety than any real differentiation in the mind of consumers. A large range of vanilla products, with very little variation.

So, the category becomes aggressively competitive, even bloody, with one brand trying to shout over others …

“BUY BE, BUY ME, BUY ME!”

And, having their products available anywhere and everywhere, but even then, there is typically a competitor immediately beside saying …

“SAME, BUT CHEAPER!”

This is a hard fight, often to the bottom, as the product is devalued and weaker businesses start to be unable to sustain the low margins and incumbent cost structures.

BUT WAIT, there may be another way!

To sail in uncontested waters, sell a different product, to unique customers. Just think Cirque du Soleil in an sea of Lennon Brothers. Or, Vinomofo in an ocean of Dan Murphy’s. And, Haigh’s Chocolate continues to sell Australia’s best chocolate in their own stores and online. While such brands may not make their competitors disappear, they start to make their competitors irrelevant.

So, what does it take to make competitors irrelevant?

1. Relationship innovation:

Provide a clever path to starting, nurturing and spreading relationships. Is there a better way to build visibility amongst a non-traditional and uncontested customer base; better communicate a clear value proposition than alternatives; generate leads and sales; and ignite happy customers to refer to friends, family and others? Vinomofo has a unique way to engage wine lovers to join online, buy curated and affordable premium wines, and be empowered as a Tribe of supporters.

2. Value innovation:

Offer a unique value proposition to customers, likely a wider and distinctive target audience to the traditional category. Offer an enticing value proposition that re-defines the product for a new market. An experience like no other that entices new audiences like Cirque du Soleil away from outdated circuses. Rather than viewing themselves as competing in the circus category, they have redefined themselves into a 'must see' global travelling theatrical extraviganza.

3. Cost innovation:

This comes back to reimagining the underlying cost structure and model to not only reduce the cost of production, delivery and service, but also to improve the customer value. This may be through reducing the middle tier in the supply chain, such as distributors. Models such as AirBnB remove the intermediaries and capital investment of large hotel groups by unlocking the share economy, and with this their model reduces the cost structure, allows savings for customers as well as making it more difficult for market entry competitors.

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While competitive advantage will likely be gained from relationship, value and/or cost innovation in isolation, making competitors irrelevant (or less relevant) will more likely come back to offering a stronger relationship model and unique superior product enticing new customer markets at a lower cost base.

Critical is creating a burning platform to motivate the change to a new model. This can be challenging for large, well established businesses with complex organisational structures with low levels of risk tolerance. Even with pending DOOM some businesses move very slow.

Herein lay the opportunity for more agile and less restrictive businesses. While the old brand category dinosaurs are slowly moving into new territories, talking big on innovation, it takes a very long time for their instructions to move from brain to feet. Entrepreneurs have the opportunity to reimagine with far more agility and stamina.

Never before has it been easier to make competitors irrelevant.

What are your observations across different categories?

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