We live in a hyper-competitive society, and branding strategy is often informed by our predilection for winning by crushing the competition. (An unsavory visual, eh?)
In “Strategy Is Not About The Competition,” an article contributed to Branding Strategy Insider by Ken Favaro, this concept and a countervailing view are concisely and elegantly examined.
Mr. Favaro takes to task those marketers who think of competitors as the enemy, an idea first articulated by Michael Porter, whose textbook Competitive Strategy hit academia in 1980. (He notes that Bill Gates operationalized this concept when he focused on smashing Netscape.) Of course, we see military language everywhere in business. Think of “battle cards” for salespeople, marketing “campaigns,” and “blitzes.”
But businesses are not necessarily rewarded for declaring war on the competition. As Mr. Favaro puts it, “ … war is mostly a zero-sum game, and business is mostly not. Companies are disproportionately rewarded when they create new value for customers and grow the market for everyone.” (Italics mine.) So simple. So revolutionary. And so focused on what should be happening, rather than on the waste of effort, energy, and—dare I say it, creativity—involved in waging war. Think about the companies that have done well with this strategy and have revolutionized markets. I bet you can call to mind at least five in the next few seconds.
Companies that are more interested in destroying their competitors, says Mr. Favaro, tend to put delivering real customer value to one side in favor of “product-feature frenzy or predatory pricing.” He cites GM and Ford versus the Japanese auto makers in the ‘70s and ‘80s and Steve Jobs’ war on Google.
Clearly, a company ignores its competitors at its peril. In fact, spending some time in understanding their value propositions can help you improve your own. Mr. Favaro notes, for example, that JetBlue “systematically studied traditional airline offerings and what customers like, disliked, and didn’t care about them.” This led to a “focus on what really matters.” Which was comfortable seating with better legroom, individual media consoles, and a range of tasty food options for sale. (Goodbye free “airline food.”)
Companies that think about how to deliver what their customers value will probably end up doing pretty well in a healthy and growing market. Mr. Favaro says it best. “Strategy in business is different than strategy in war and sport. … It’s about the customer, your value proposition, and the capabilities you need to deliver it better than anyone else.”
Have you worked for companies with different ideas about facing the competition? Which did you enjoy working for most?
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