How does your company protect against competitive threats? What is your long-game business strategy? How do you thwart market changes?
To thrive, a business must be constantly aware of the market and how things are changing. Knowing what the competition is doing, how economic changes affect you, where your next growth market is, and so much more.
While successful businesses are constantly adjusting . . . . with many strategies . . . . One plan stands tall in all sorts of weather.
What things will protect your market position? How can you be ready to advance when there is need for changes?
Strategy Answers
The one constant is change. Yet, compensating does not have to be change as a reaction. Rather, use change as an offense. If you want to protect your market position, keep moving your market position. After all, it is the little bits that make the big difference.
Compare for a moment to sports. No team ever won by defense alone. At some point the winner must score, or the best possible result is a tie: 0-0
Of course, in business strategy there are a lot of offense actions - like marketing improvements, broader product lines, operational efficiencies, and more. These are the standards. However, there is no question, the company that continually innovates best holds the Aces.
Think about it. Companies known for innovation are the ones people follow. The ones that get noticed and the ones with the most attention - free attention. They are the ones that garner the most loyalty, and the greatest brand recognition. This is the strategy of advancing.
Business Strategy Leadership
Significant innovation means leadership in an industry or business segment, and it shows not just in new products. Innovation appears in marketing, in services, in Consulting, and even in human resources. For inspiration, read this article about finding a Lever to Boost the Bottom Line.
And leading, always at the front of your industry, is not only the best defense - it's a great offense. When you can be the worry of your competitors, then you are integrating this best business strategy.
Innovation Examples
I'll use three recognizable examples. While these are big names, the same is a also true in smaller scale, for every day home town businesses too.
Hewlett Packard
Hewlett Packard grew to its heights in precision instruments through constant innovation. They were well known for great quality and for being at the front edge of instrumentation development for scientific and medical and others. They did it again, arguably even bigger with printers and leveraged that success into computers.
The Hewlett Packard success story is well known.
Unfortunately, in more recent years HP has not kept up the innovative advances. Perhaps they became complacent, or management got distracted. Either way, the lack of innovation in their business strategy is one of the reasons they have struggled with market share.
Kodak
Kodak was the biggest name in photo film by innovating the best photographic film, and the best processes to develop it. They were a household name synonymous with photography, and they innovated some of the best disposable cameras as well.
Remember the saying "It was a Kodak moment" ?
As digital photography stepped in, they stepped out - because they didn't innovate with the new technology. (To be sure, Kodak had digital cameras, yet they were late to the game and their offerings just weren't compelling.) As the film markets dropped, Kodak missed the business strategy of innovation into other areas to sustain them. Where are they now?
Apple
Apple. Over the years we have seen Apple innovate to the top, then begin to flounder, then innovate up again. Consider the early Macintosh computers; then ipods. Now, of course, the iphone and ipads are everywhere. Perhaps more importantly, they have a following that is eager for every new product announcement.
With Apple, we have seen the rise and stumble more than once, and each time, it is innovation that lifts them again. Like them or hate them, they have certainly changed the landscape. So what's next?
I don't believe their story is over. Perhaps they are in an innovation slump again? Hard say, but high levels of innovation are not the current rule at Apple.
When innovation captures customer attention, business success follows - usually. Sadly, some companies fail to deliver on promised innovation, and that is a completely different story. A good business strategy and great ideas can't compensate for poor supporting structure, and the opposite is also true.
Why Innovation Works as a Business Strategy, and Why It Doesn't
When you truly innovate, you have no competition. Sure, copycats will come, but if you are always onto the next edge of innovation, you will always be one step ahead of your competition. That's how this business strategy works.
Oh, that sounds so good, and it's absolutely true, BUT it is really hard to always push your own boundaries. As in the HP example, they came to a practical point where they couldn't figure out how to innovate printing farther - where it didn't make sense to print any better. In fact, they were printing so well that most people couldn't see the improvements. They hit a practical plateau.
Really, HP was developing printing techniques with spots so small that the human eye could not distinguish the differences in technology. It's not that they failed to innovate and improve, they just hit a practical limit in that direction. So what should be next? Were there other directions they could have / should have innovated with printing or presentation materials?
We see it in all of the big examples above. They innovative, they succeed, then they struggle to find the next area to innovate in the market. That is, the "Achilles Heel" in being the innovator.
Plateaus and creative competition are areas where people struggle to stay on track with this business strategy. That said, both plateaus and competition are symptoms showing where innovation is lacking. Watch that.
How Do You Innovate?
That is the Billion Dollar question. The first step is to get in the mindset of thinking it. How can you improve for your customers? What are things that will make life better / easier / faster / more efficient / simpler for your customers.
So how do you innovate?
Maybe it is with new products? (Like innovating from Dot Matrix to Laser Jet printing.)
Perhaps a creative new customer experience? (Think about Dell's creative way to sell personally configured computers online.)
Possibly a Marketing masterpiece? (Embodied by the Nike Swoosh and the Apple symbol.)
Or, an anywhere service paradigm? (Like DoorDash or Uber - both are innovations in their own right.)
There is no limit. Yet, I can only speak to history, not the future (because if I knew it, then it would not be innovation). How you choose to propel your business forward is, of course, entirely up to you. A best (not necessarily "THE" best) business strategy is to set your sights on innovations.
The point here is there are many possible directions - not just new products. Set your mind free to explore the possibilities. What do you do best? Start thinking about how you can do that different and better, then let those thoughts guide innovation.
Innovation as a Business Strategy
Can you become more creative? Check out that article. Sure, some people are naturally creative, but anyone can learn. Everyone has the ability to observe things that are happening, then to improve a customer experience.
When you produce something that no one else has, you create a distinct competitive advantage. Not just anything, of course, but something that fills a desired purpose. This is a business solution. Likewise, when you provide a service that no one else will, it's your advantage. Or if your company innovates on the inside, that might attract and retain super top talent. Truly, innovation as a business strategy is available everywhere.
Breaking A Competitive Threat
Does this all sound so good, maybe too good? Perhaps out of reach? That is a common response. Truth is, we all need a little inspiration once in a while. So, ask your staff. Ask your customers. Or, ask us. Just don't get yourself into silly disputes.
Your competition is also moving, and perhaps reading this same article. The best option for advancing over a competitive threat is to side-step it completely by innovating beyond. Your innovation does not need to be in the same direction as your competition. If your competition is coming out with a new product, for instance, perhaps you can come out with a new customer recognition process, or a new warranty, or an innovative service paradigm. You can't keep your competition from innovating, but you can certainly innovate better in other directions to mitigate the competitive threats.
At Synthesis we are innovators that focus on customer solutions - especially in the product development world. We have helped many customers into new patents, and new product directions. We are not the gurus of Human Resources or detail Business Strategy (far from it), but we know how to innovate. (You can see that just in the number of patents we have had a part in.)
Of course, if you want our help, it is easy to connect. Have a wonderful day.