Competition
Competition
Last month I encountered, I guess, one of the most amazing statements I have ever heard from a CEO of a large company. An employee had approached him and stated "Company ZZZ, our major competitor, has decided to target kids from the age of 12-18. What should we do?". The CEO responded with "Let's send them a card saying 'Good Luck'".
Sadly, it really did end there. Company ZZZ went on to making huge inroads into this market, capitalizing on some basic research and market understanding - to put it in perspective, Company ZZZ grossed more then $200 million in their first year in this emerging market.
The CEO that made the statement of "good luck" spent the next three years (after discovering that the competition was successful) trying to catch up with Company ZZZ - and really was never able to gain market share.
Why did this occur? A few things come to mind:
a) The CEO made it personal between his company and that of the competition - he never stepped back and looked at the opportunity, only that he hoped the competition would fail - Don't make business decisions on personal feelings or basis
b) The CEO could have quickly and easily been able to enter the market much sooner if he would have sent the employee who brought the information to him to do a little research into the potential market and "WHY" the competition was targeting this market - because he either didn't believe in the potential or didn't want to "copy" the competition, his failure to act cost his company millions, and soon, billions, of dollars
c) He didn't know about it, hadn't thought of it, so why try it
d) His companies resources were already stretched too thin and couldn't switch gears to get into the action.
There were, of course, many more things, but, I think you get the idea.
There are three types of companies in the world - Oil Tankers, Mid-size boats, and Speedboats.
Speedboats can turn on a dime and react to market fluctuations and survive, but, they usually can't deliver large volume and expertise in a given field - Asia owns the "market" on speedboat companies.
Mid-size boats can turn quickly to react to market conditions and also be able to deliver large volume - they keep themselves streamlined so they can quickly react and move with the market (and not against it).
Oil Tankers (and we all know at least one of these companies) can deliver huge volumes of product and are there when you need their specific product (keyword - specific), but, either because of their size, expertise, or mentality, they are unwilling or unable to change with the market.
There are numerous books on companies turning from Oil Tankers to Speed Boats, so, I will stop with this analogy here.
A few last words:
1) Never make or take the competition personally - they are in business, just like you, to make money and sell product
2) COPY the competition - there have been too many times in all my years where I have heard VP's of Sales and/or Marketing say "We can't do that, the competition is doing it". Forget it - copy the competition (of course, respect all patents and IP involved), there are many times that copying them does not cost money (or legal issues); for example, remember when you bought a TV and there was a warranty card inside? And then, there was a warranty card AND the option to go on the web and register the product? Many companies would not do the web registration - even though it saved thousands of dollars - because they didn't want to copy the first company that did it. Look at Asia - they make trillions of dollars a year, legally, by copying product on the market (and I am not referencing the illegal products that are also manufactured in Asia).
3) Step back and look at the forest - always. A word, that cannot be overused (even though I know some of you will argue with me), is convergence. Especially in today's technology market, products are converging so fast, that many companies that refused to look at the whole forest, are gone. The PDA market never believed that the cell phone would be serious competition - now look at who is left in the PDA market? Convergence is key to the success of you OR your competition - don't just look at the tree (your specific market) you are standing in front of, step back and look at the forest on occasion.