The Surprising Way To Eliminate Your Competition
It’s never been easier for the competition to creep up behind you and take you unawares. This is especially true online, where free and open source technology allows for the "cloning" of nearly every type of website—and usually quite quickly. Gone are the days when it took serious capital to create a copycat business or even a viable competitor to steal market share.
How do you keep up with the endless competition and seriously compete in an agressive marketplace? This is the kind of question that keeps small-business owners like you and me up at night.
But there is another way. Instead of matching your competitors feature for feature, try taking an easier road to overcoming your competition: rendering them irrelevant.
Blue Ocean Strategy
Savvy businesses have been able to neatly sidestep their growing competition and work in crystal calm industries by creating their own, new markets. This concept was been made popular in the book Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant by W. Chan Kim and Renee Mauborgne. Instead of competing on features and razor-thin margins in crowded, cutthroat markets (aka, red oceans), the book reveals how to create brand new markets without any competition (aka, blue oceans).
Cirque de Soleil is the classic example of a "blue ocean" strategy. In the 1980s, the circus industry was in a rapid decline. Competition for the best acts had risen, the overhead of keeping and training animals was becoming increasingly expensive, and other forms of entertainment were on the rise, like home entertainment systems and live sporting events.
Instead of trying to compete head on with circuses, Cirque de Soleil decided to go another route: It took only the best features of the circus (the acrobatics, the clowns and makeup, the tent) and added its own creative elements (art, changing musical score, storyline). By taking the best elements of the circus industry and fusing them with the unique elements of theatre, Cirque de Soleil completely changed not only how the circus looked but also who came to the circus. What was once primarily a cheap form of entertainment became something people were paying premium prices to watch.
Today, the traditional circus industry is all but gone, but Cirque de Soleil is a massive industry. The best part: It literally has no competition because it created its own market.
Creating Your Own Blue Ocean
Blue ocean companies are able to sidestep their competition because there literally is no competition. But to get there, you have to be willing to take drastic measures. Check out these four examples of things you might have to do to swim and survive in a blue ocean:
1. Be willing to drop features. Just as Cirque de Soleil decided not to use animals and high-priced talent, you’ll have to resist the temptation to compete head to head on features with competitors. (More often than not, your product already suffers from having too many features, which just adds up to technical debt for your company.) How can you simplify to bring costs down?
2. Add different features. This may seem obvious, but adding drastically different features to your products and services means you’re changing your product into something previously unseen.
For instance, NetJets disrupted the private aviation market by allowing companies to share time on jets in exchange for drastically lower costs and better efficiency (schedule a jet and have it ready in two hours). Previously, a company would have to buy its own jet, contract a pilot and deal with the logistics of maintenance and scheduling.
3. Challenge assumptions. New markets are often born out of challenging entrenched assumptions about an industry. Take one of the oldest industries on the planet: the banking industry. Simple has flipped banking on its head by proving that people are willing to forgo banks with physical locations in exchange for a superior online banking experience. Sometimes the best opportunities for blue oceans are found in older industries.
4. Change market scope. Creating a blue ocean often means aiming for a different demographic. It might just be a smaller, more focused demographic. Facebook did this by starting out in the Ivy League colleges and only allowing college students to join.
Or maybe you’re looking at the wrong demographic altogether. Take the fitness chain Curves, for example. Before Curves, the fitness industry focused on working professionals (namely men) who could pay costly monthly gym fees and wouldn't mind the commute to inconvenient gym locations with expensive equipment. Curves changed things up by focusing on women, discarding gym equipment and installing inexpensive fitness stations, and motivating women through encouragement from peers rather than walls of mirrors to show their progress.
It's time to take an objective look at your company and its current competition. What’s not being offered? What’s currently being offered that sucks? There’s a lot of money out there for companies who correctly answer these questions and act on them.
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