Gaining Competitive Advantage
One of the greatest challenges facing a company is attempting to winagainst a market leader. In many cases leaders have substantial advantages based on their position in the market, including pricing power, brand recognition, control of distribution channels, a satisfied customer base. Here, three best practices that enable companies to win against marketleaders.
1. Accept the reality of the competitive landscape
The competitive landscape is often harsh and unforgiving. The first best practice is to understand where you exist today and accept that reality. You'll only be able to win against the market leaders by defining your own
terms which means accepting what you can and cannot do. Once a company is clear about its place versus competitors, it can develop a clear strategy based on reality, rather than hope.
Study the competitive landscape and you will see that the leaders have established themselves in ways that you can leverage. They have usually educated the market and built awareness about your product category, set customer and channel expectations, and created momentum and demand that will exist regardless of your best efforts. It's best to swim with the current when the current is strong.
Market leaders can often bring a whole solution to market without a partner. Other companies can focus on partnering to create and deliver the entire solution. This approach further emphasizes the multivendor approach that some prospects desire, and also adds to their competitive advantage as the company leverages the go-to-market capabilities of its partners.
2. Pick an opening in the competitive landscape to own
Market leaders have disadvantages you can leverage. To address a new market opportunity, they must meet high hurdles--much higher than yours--for size and growth. In addition, their ability to move quickly is limited. This means they'll leave opportunities for you to find segments that you can own--segments that don't appear to be large enough or growing quickly enough for them--before they can create a competitive advantage in that segment.
Your leverage lies in narrowing your focus to a market segment you can own and define before that particular market segment becomes appealing to your competitor.
3. Relentlessly enforce your market focus decision
A corollary best practice to narrowing your market focus is enforcing that decision. One of the biggest strategic challenges facing companies is learning to say "no" to sales opportunities. Not pursuing business is a difficult decision to make, requiring a certain corporate courage. The sales organization will present undeniable revenue opportunities that fall outside of the strategically narrowed focus. Successful companies will choose to not pursue this incremental revenue, at least until these opportunities are sufficient to change the corporate strategy.
Once you've narrowed your focus and differentiated yourself, how do you keep it going? Revitalize your strategy.
Nobody said winning against the market leaders would be easy.
About the Author
Glenn Gow founded Crimson Consulting 13 years ago. He has consulted on strategic marketing issues for many successful companies worldwide (including Adobe, BEA, Cisco, HP, IBM, Intel, Microsoft, Oracle, Seagate, Sprint, Sun, and Symantec), as well as dozens of emerging companies. Under his leadership Crimson achieved Inc. 500 status when Crimson became one of the fastest-growing U.S. companies. Visit Crimson Consulting