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Your Most Dangerous Competitors

Take a moment and make a list of your competitors -- you can build the list in your mind, write it down or type it as you see fit. Now, which of those companies are your most dangerous competitors.

I expect you are wrong.

When you listed your competitors, I expect you listed companies similar to yours (or, if you are in government, you probably listed a similar country, region or city. When I did a workshop for the Prime Minister's office in Dubai, I asked if they had a competitor. Participants immediately responded with "Qatar".). These companies probably make products and offer services similar to yours. Their business models, customers and marketing approach are all probably a lot like yours. Very likely, the market dynamics have remained consistent over the years (just as Coca Cola and Pepsi have held similar places within the global market for decades).

Yes, these companies are your competitors. But, they are not particularly dangerous. Unless one of you does something crazy, the market dynamics are unlikely to change for the foreseeable future.

The Deadly Competition

Your most dangerous competitor is not a business like yours. It is a small start up run by a couple of kids out of student housing in Mumbai. It is an IT company just launched by a small team of young people in Silicon Valley. It is the latest new project by Google or Facebook or Apple, a company that you never perceived to be a competitor. It may even come from a creative person in your organisation whose idea was perceived as ridiculous by her manager. So, she went and set up a competing firm.

For Example

In Detroit in the early 1900s, if you asked a blacksmith who his main competitors were, he would have named other blacksmiths. He would never have guessed it would be a engineer named Henry Ford who was making a cheap motorcar. Cars were expensive toys for the rich and no threat to the massive horse industry of the time. Or so he would have thought until he went bankrupt.

Up until about 20-25 years ago, if you had asked the CEO of Smith Corona who his top competitors were, he probably would have said companies like Royal, Olivetti and other typewriter manufacturers. If you had said, "No, it's actually Microsoft," he probably would have laughed. Today, Smith Corona is a shadow of its formal corporate self. My kids have probably never seen a typewriter.

In each of these instances, the most threatening competition came not from the companies perceived as competition -- but from unexpected start ups and existing companies in completely different sectors. It could happen to you too.

An unexpected competitor launches a product that is completely different to your (and your perceived competitors') existing, established product, but which accomplishes the things your customers want better than your products can do. They are, of course, disruptive innovators. And, if you do not pay attention, you will not notice the threat they pose to your business until your customer base begins to evaporate and you have to go into damage control mode to save your business.

The current fast pace of technology development means that game-changing products are being developed all the time. And a new generation of people who live a substantial part of their lives on line means a market where virtual products are as important as real-world products.

Moreover, I predict that in a few years, we will see self-programming software in which you explain your needs and a software-making software programs it for you. This will not only disrupt the software industry, but it will allow anyone with an idea to build software to make that idea happen.

What Can You Do?

What can you do about it? There are several steps you can take.

You cannot stop progress. Rather, you need to exploit it. Your competitors are not businesses like yours. But, if you can adopt the disruptive innovation that threatens your sector, you hope to survive the onslaught better than those other businesses. Better still, if you can create the disruptive innovation you can grab a massive market. But to do that requires an incredible commitment to innovation.

Good luck!

 

Talk to Me!

Do you have a plan for disruptive innovation in your industry? If not, talk to me and let's make a plan that could save your company one day. Reply to this newsletter or follow this link...

 

 

 

Want to Discuss This With Me?

If so, get in touch. I'd love to chat about it with you!



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Jeffrey Baumgartner
Bwiti bvba

Erps-Kwerps (near Leuven & Brussels) Belgium