Exploiting the Competition
(Part two of a two-part series.)
In the first installment of this two-part series on exploiting the competition I addressed how to identify and protect your business against various forms of competitive threats. In the conclusion to this series I want to share the best method for separating your business from the competition by using disruptive innovation.
Let me begin by asking you this question: Why would you want to do business in the same fashion as your competitors? Don’t utilize your competition’s practices, but rather innovate around them and improve upon them to create a competitive advantage that can be leveraged in the market. Be disruptive in your approach and don’t fall into the trap of doing something in a particular fashion just because others do it that way.
I want you to take a moment and critically assess whether or not you utilize a disruptive business model. While much has been written about corporate vision, mission, process, leadership, strategy, branding and a variety of other business practices, it is the engineering of these practices to be disruptive that maximizes opportunities by creating performance gap advantages over your competition. Without a disruptive focus you are merely building your business model on a “me too” platform of mediocrity. Utilizing disruption as a key business driver to underpin your business logic and business rules will catalyze new levels of growth within your business.
The Focus of the Disruptive Business Model
Disruptive business models focus on creating, disintermediating, refining, reengineering or optimizing a product/service, role/function/practice, category, market, sector or industry. The most successful companies incorporate disruptive thinking into all of their business and management practices to gain distinctive competitive value propositions. “Me too” companies fight to eek out market share in an attempt to survive while disruptive companies become category dominant brands insuring sustainability.
So why do so many established and often well-managed companies struggle with disruptive innovation? Many times it is simply because companies have been doing the same things in the same ways and for the same reasons for so long that they struggle with the concept of change. Many of my engagements with CEOs focus on helping them to embrace change through disruptive innovation. Why didn’t the railroads innovate? Why didn’t Folgers recognize the retail consumer demand for coffee and develop a Starbucks type business model? Why didn’t IBM see Dell and Gateway coming? Why have American automakers been relegated to inferior brands when contrasted to their European and Asian counterparts? How did the brick-and-mortar bookstores let Amazon get the jump on them? I could go on and on with more examples, but the answers are quite simple: The established companies become focused on making incremental gains through process improvements, were satisfied with their business models and didn’t even see the innovators coming until it was too late.
At one end of the spectrum take a look at the companies receiving investment from venture capital and private equity firms, and on the other end of the spectrum observe virtually any category dominant brand and you’ll find companies with a disruptive focus putting the proverbial squeeze on the “me too” firms occupying space in the middle of the spectrum. With the continued rapid development of technology taking the concept of globalization and turning it into hard reality facing businesses of all sizes, it is time for executives and entrepreneurs to examine their current business models from a disruptive perspective.
