Strategy: out compete the competition

How to outcompete the competition

In mature often saturated markets developing a unique strategic position which gives you sustainable competitive advantage in your market is the holy grail for business owners. To be somewhere that your competitors aren't, and to have something that cannot be taken away is what everyone setting up in business dreams of achieving. It is one clear defining way of out competing the competition is to develop a sustainable competitive advantage in a market

Sustainable Competitive Advantage

Few companies can lay claim to that holy grail position for any length of time, here are some that come immediately to mind: Ferrari, Rolls Royce Engines, Hoover, Apple's Iphone and Ipod, Boeing, Walkman, Sky, Microsoft Windows, are all good examples of companies who have achieved, or are holding it today. 

Dyson: Model of Creating Market Leadership 

To be recognised as the market maker such as Hoover gave it unbelievable control of the market for most of the 20th century, not only owning the market it was even named after them. What changed? A loss of focus and desire to continue to own the market coupled with the airplane ticket fiasco which opened the door to new competitors and to one man in particular James Dyson  who grabbed the opportunity to replace Hoovers once held position in the market launching his own Dyson brand through technology shift of his cyclone bag less vacuum. 

His passion, created from vacuuming at home and becoming frustrated, seeing the cyclone idea at a sawmill which then took 15 years, 5,127 prototypes to turn into a winning product, which today benefits upon 60% recommendation purchases and has allowed Dyson to spin his cyclone technology into air dryers and washing machines. 

Features of Strategic Competitive Advantage 

What are the key features of sustainable competitive advantage for any company in their market, well here are the most commonly found top five:-

• Charge a premium for its services; even low cost suppliers out price other low cost suppliers.
• Lead the market by innovation; will get to market new ideas quicker or in a more dominant market shift way.
• Controls the key channels to market; from buying decision processes to pricing structures.
• Owns the pace of change within the market; from technology development and consumer shift
• Control of buyer activity; the significant majority of the share of buy (SOB) and share of space (SOS) through its dominance.   

To achieve sustainable competitive advantage is extremely difficult, most companies manage to reach a challenger market position. For that to happen their has to be a clear vision of where the company is going and where the market opportunity exists. For men like James Dyson the advantage was that he was in the right place at the right time, with the right product that enabled a technological shift in the market with his bag less vacuum.

If you want to develop your company's position then there needs to be a vision for it, where it is going and why. If your look for some advice on developing your company, its marketing, its sustainable competitive advantage then contact us at Cowden Consulting to see how we can assist you, or read more about us in this blog or at Cowden Consulting.

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Strategy: How Steve Jobs changed the world

Apple’s founder and talisman, Steve Jobs has finally had to step down from running the world’s most successful company, it is probably overdue that the world recognises this brilliant strategist who changed the world.

Had Steve Jobs just set-up Apple he would have gone down in history as a great inventor, but to have done it twice over with the same company, creating the world’s biggest company in the process surely makes him the greatest ever. Possibly his most important contribution was that he created markets and then the best products possible for those new markets. Steve Jobs understood that the technology needed to work for customers, rather than expect people to work the technology.   

As a brilliant businessman and strategist, he more importantly created world class products and ran the company that delivered those products to market. Most superb inventors just invent and most great directors’ focus on leading, to do both simultaneously to such a high standard is an outstanding achievement.       

Steve Jobs is so unusual because he understands that great technology does not sell itself and that to have great technology you have to be passionate not only about what you produce, but also about the world in which your products exist.

Steve Jobs potted history 1976 started Apple with Stephen Wozniak to make and sell printed circuit boards 1978 launched  a new disc drive which made the money to invest in whole computers Launched the revolutionary Macintosh computer in 1984 Ousted from Apple in 1985 and returned after creating NeXT in 1996 which Apple bought Created Pixar with $5 billion in box-office sales, sold for $7.4 to Disney in 1996  Created the i-generation with more to come such as iCloud and entering the TV market

While to many who did not understand his holistic strategy they looked for and saw flaws, tried to stab the ego and even removed him from his own company (to play safe with what he had produced as a single new product).  He played the long game recognising that the world would not be changed overnight, this was his strategic master-stoke, he got the timing right by understanding the big picture and knowing when to strike.

He has been described by those who have worked with him as wilful, irascible, temperamental and stubborn, to name a few, but can anyone do so much without at least those characteristics to change the world? Other words, which people often use to describe him, include perfectionist, insistent and mesmerising and that is how the world will remember how he has achieved such global success.   In his Stanford address in 2005 he explained what made him, drove him and continued to motivate him to become the person and the huge success for which the world will remember him for.    

Steve Jobs changed the world. He saw a world revolution in technology before anyone else and saw how he could drive that change. Great strategic thinking not only thinks about change but also the impact of that change will have, and that’s what makes him simply the best. Other owners and directors were working on improving their share price or becoming number one with their new product, focusing on the today, this month’s or this years priorities, Steve Jobs drove Apple to rethink the world and in doing so became its biggest player. His line in recruiting John Sculley from Pepsi “Do you want to sell sugar water for the rest of your life or do you want to come with me and change the world” sums up his strategic brilliance.   

Evidence of this brilliant approach comes throughout his career, from Vangelis’ Chariots of Fire music to launch the Macintosh, through to his unforgettable iPod launch where with a huge back screen shot he casually produced it from the back pocket of his jeans; Steve Jobs has learnt how to successfully engage with audiences. Every product is meticulously planned with product lined up to two years in advance, with innovative marketing from start to finish.

From a business selling technology, it is now seen as having the best retail environment that people actually want to visit Apple shops where the focus is on excellence, not on pedalling technology cheaper than the next retailer. Steve Jobs has always had an eye for detail, which his artistic flare turned geeky boxes into works of art; a calligraphy course he went on led him to have a non standard font Apple Garamond created rather than traditional New Roman Times font, something he goaded Microsoft about at a high school speech some years later. That attention to detail is what demonstrated his perfectionist approach and left the competitors looking and feeling like they were in the dark ages.          

Apple’s “Think different” strategy has worked so well since 1997 because it touched people who felt there was no alternative to the Bill Gates and Microsoft monopoly of software. Think Different also drove change for both the 50,000 Apple employees and allowing his strategy to infect and spread globally.  It was not only technical people who bought into Macs but a whole new generation of users who found that there was a credible alternative that did more than just be a glorified typewriter.

              

While Apple was never one man, Steve Jobs legacy will be difficult to estimate for many years to come as the world’s most successful businessman. The old adage it is not what one has done that counts but what one leaves to grow that is the measure of a man’s success and that will take time for the world to see his true legacy, but the following puts some numbers behind this success.  

Since Steve Jobs comeback in 1997 Apple has sold:-

• 26 million iPhones
• 60 million computers
• 200 million iPods
• 1 billion iTunes songs   

Apple is currently valued at $356 billion ($2 Billion ahead of Exxon) making it the largest company in the world. Last quarter alone Apple profits more than doubled to $7.3 billion, sales rose by 82% to $28.6 billion by selling 20 million iPhones, 9 million iPads, 8 million iPods and 4 million Mac computers .

Steve Jobs announcement of his retirement wiped $17 billion *(5%) from its market share, but he has increased its share value by 9000% since 1997.   

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Do you have a vision or are you just a dreamer?

No matter how big or small your business is without a clear vision of where you are going owners and directors often fall into the classic trap of just managing from day-to-day.

Envisioning, the ability to see into the future and imagine how things could be, is as important for success as having real passion for the business and the determination to create something new. These three personal qualities of leaders are vital for successful companies and a vision statement, sometimes called “a picture of your company in the future”, but it’s so much more than that.

Your vision statement is your inspiration, the framework for all your strategic planning. A vision statement may apply to an entire company or to a single division within that company.

The vision statement answers the question, “Where do we want to go?” What you are doing when creating a vision statement is articulating your dreams and hopes for your business. It reminds you of what you are trying to build. A vision statement is for you and the other members of your company, not just for your customers or clients.

Visionary goals should be longer term and more challenging than strategic goals. Collins and Porras describe these lofty objectives as "Big, Hairy, Audacious Goals." These goals should be challenging enough so that people nearly gasp when they learn of them and realize the effort that will be required to reach them.

Most visionary goals fall into one of the following five categories:

1. Targeted - quantitative or qualitative goals such as Nike: "To bring inspiration and innovation to every athlete in the world" “If you have a body, you are an athlete.”
2. Common enemy - focused on overtaking a specific firm, becoming the number one in that sector, such as Amazon: "Our vision is to be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online."
3. Role model - to become like another in a different industry or market, the mirror role, Victoria Beckham (Posh Spice) "Right from the beginning, I said I wanted to be more famous than Persil Automatic”.
4. Internal transformation – creating internal vision, GE set the goal of “Becoming number one or number two in every market it serves”

While visionary goals may require significant stretching to achieve, many visionary companies have succeeded in reaching them. Once such a goal is achieved, it needs to be replaced; otherwise, it is unlikely that the organization will continue to be successful. The second most dangerous place for a company is to have achieved its only goal, the most dangerous place is never to have had one. 

Simple steps to creating your vision, ask some simple questions:

• What will our business look like in 3 to 5 years from now?
• What new things do we intend to pursue and how?
• What future customer needs do we want to satisfy?

Write the answers down and focus on developing them into a coherent, motivational and purposeful message which can connect with everyone. 

Then Question:

• Does our vision statement provide a powerful picture of what our business will look like in 3 to 5 years from now?
• Is your vision statement a picture of your company’s future, which everyone can interpret into their role?
• Does it clarify the business activities to pursue, the desired market position and capabilities you will need 

If your statement answers these questions then you have a vision worth owning and sharing. A vision must be motivational to everyone inside an organisation. 

The classic apocryphal story to demonstrate the effectiveness of great visions is about the time President Kennedy visited NASA. During one trip he came across a cleaner sweeping the warehouse floor, and asked him what his job at NASA was. The cleaner replied “My Job is to put a man on the moon, Sir.” 

Now I don’t know if the story is true, but it’s inspiring. In a facility full of high-powered individuals and great minds, even the cleaner was completely on board with the strategy. While you may not be planning to put a person on the moon, we can learn a lot from the story. It may sound ridiculous, but every business needs to be a little like NASA.

Great visions can create an unstoppable company

Every organisation needs to have a clear goal, owned by everyone inside and outside it. An owned and shared vision creates and sustains great morale and internal strength for companies, which can become a powerful and unstoppable force in any market no matter how competitive.  

At Cowden Consulting we focus on ensuring companies can successfully compete in their chosen or desired market.

Successful People Plan Their Business

Business planning often gets a bad press, yet those who do sit down and plan their business are so much more focused, confident, and successful than those who float along with the economic tide. Over the past ten years as a strategic planner we’ve worked with hundreds of business owners and seen how those that create a plan and implement it, do so much better then those owners who try aimlessly lead their business on a wing, a prayer or a dream.  

According the latest BERR report, Small and Medium-sized Enterprises (SME’s) together accounted for 99.9 per cent of all enterprises, 59.8 per cent of private sector employment and 49.0 per cent of private sector turnover. SME’s really do matter to the British economy, and yet they receive little effective support from Government agencies despite being the backbone of the economy, employment, and innovation.     

Why Businesses Don’t Plan       

“If you don’t make things happen, things will happen to you” Lanes Company

Having questioned business owners over the last decade the reasons why owners have not put a plan in place and executed it, the excuses range from not having the skills, make the time, or have the conviction of their thoughts. The number of owners  who know they should have a plan ‘we had one when we first started, but have not looked at it since’ is a common theme, as is being too busy fire fighting to realise that preventing fires starting is the best way to not have to fight them.  

Do business owners not see the value in developing a plan for their business? On the other hand, is the classic perception for business owners that frenetically staying alive is seen as being successful? For many not knowing how to plan is one major reason why people haven’t and don’t plan their business. Where to start and how to know what they are trying to achieve immediately puts people off planning. Business planning is also often at fault, the most common reason people have a plan is to secure funding from banks, that’s when banks did fund business start-ups (now they just offer a high interest mortgage backed by the Government). Therefore, once people have received funding they no longer see the main advantages of planning (and the real advantages are not around money). 

Planning Skills – Have some GOALS

"The discipline of writing something down is the first step toward making it happen." - Lee Iacocca

Planning takes time, resources, (grey stuff) not the executive trip to some exotic away weekend planning, but some time allocated to review where you are as a business, how your sector and industry are performing and what you want to achieve in the future. Whether it is looking at the next year or planning the next five years, everyone who owns or directs a business is responsible for setting its direction. However, just having a plan in your head, with the classic defence of ‘its flexible at the moment’ is either ducking the responsibility or deluding themselves.

The only way to have a plan rather than a dream is to have it written down, turned (if it is not already) into an action plan which is resourced and owned by someone to deliver. Only then do businesses go forward in a deliberate purposeful way. Only then do the right things happen because you made them happen and only then can everyone, employees, shareholders, customers, channel partners and even other halves, see your dream, share your dream, deliver your dream. That’s when planning works. It is a written document, which lives within your company, and it doesn’t matter if you are a one-man (woman) band or running a multi-national Plc.

What Planning Delivers

"In the absence of clearly-defined goals, we become strangely loyal to performing daily trivia until ultimately we become enslaved by it." – Robert Heinlein

Planning provides focus in strategic direction, its provides clarity of where the business is and where it is going as well as a vehicle for getting from where you are to where you want to be. Planning time provides time to reflect on personal and corporate goals, time to share and channel new ideas while reviewing existing activities.

Planning in a structured and open format develops clarity of purpose and a clear understanding of the organisational and individual skills people have and can use to leverage advantage. Bringing in outside views widens the planning horizon, which can drive businesses forward, which is why many successful businesses use non-executive directors or outside specialists to help drive their business forward. That is one reason why so many people volunteer to get support from people like the Dragons from Dragon’s Den, they are looking for expertise and advice which gives them confidence to go forward as much as the money.   

British business owners need to plan, more often to keep being successful. Good planning creates and sees opportunities as owners and directors lift their heads up from the daily grindstone. How often should you plan? Well it all depends on the speed of your market’s evolution, but even stable and stagnant businesses should review their business every year, and not just a light dusting (add ten percent and change the year) but strategically review what and how well they are doing.

It is only by looking for fresh opportunities and how to take best advantage of them, by planning your business around those opportunities that companies successfully compete in today’s business environment.

  

Planning is not a four letter word

“An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage" Jack Welch

The old adage, compete or get beat, is more relevant today than it has ever been. The rise of the Internet means there are no secrets, competitive advantage lies with those who can see an opportunity and adapt fastest to take advantage of it. Those owners and directors who see and go for opportunities become the stronger ones, and that is where good strategic business planning provides it real advantage.

By orientating a company to where it can retain better, win new and develop existing customers companies that plan their success out compete in their sector, and equally importantly have everyone focused on where they are going. From the smallest to the biggest every business needs to have a plan that is written down, owned and guiding your business in the direction you want it to go. 

Good Luck

Richard Gourlay



Learn more at: www.richardgourlay.com