On the Mind Your Business Podcast, we like to go a bit deeper than that and look at other possibilities. One of these alternative realities is completing rather than competing.
As an entrepreneur starting out, if we spent too long looking at the existing businesses in our industry, perhaps those that are dominant; already have a decent market share, a range of good products- perhaps there’s an Amazon, a great restaurant or a wonderful accountancy firm already in their space- then they might not even get started and a lot of possibility is killed before it has chance to grow.
To avoid this scenario, rather than looking at the world through a competitive lens, why not try and view it through a completing one. There are 79 million people in the UK, all with different needs, meaning there is enough audience to go around. Instead of competing with all of the other established businesses in your sector, consider how your company can add value to what is already going on, how you can make an existing service better, or create something complimentary to what is already being delivered.
Side by side competition is healthy
As an example, if you were opening an Indian restaurant would you go to the town where there are no Indian restaurants or would you go where there are a few open already? A lot of people would go for the monopoly option, but I think a better decision would be to go where there is already a proven market for your product. As long as your product is distinctively different; maybe it’s in a modern style, a high end location or a tapas offering then you can demonstrate your place in the market, identify where you compete and standout from other restaurants.
When customers consider competing in close proximity they will always do some quick comparisons. Sites like Amazon make that easy for customers by offering these like-for like comparisons on many product pages. The point is twofold; it may not be a decision of ‘EITHER’, ‘OR’ it could be decision of ‘AND’. If you are put side by side and your product does something slightly different or better, then it immediately stands out and the customer hasn’t had to travel that far to find that out!
We see it in retail, FMCG, and the pharma sector, all the time. Go to any supermarket and there are a range of different colours, flavours, price points across the mix completing the offer to the customer.
Completing the offer.
An optician client of mine had five stores. Two were in relatively low-brow neighbourhoods a couple were out of town and he had a flagship outlet on one of Oxford’s hottest shopping streets. Both of the low-brow stores were next door to Specsavers. You would think he would lose 50% of his customers and his spend per head would be considerably lower than the more famous competition, but in fact the volume of footfall he received and the profit margins available on own-brand glasses versus designer brands meant that he made all of his profit from the two low-rent locations. His business model now is to go where Specsavers is. They spend millions on driving market awareness; he simply piggybacks work and scoops up the market they can’t service.
Know your target market
This story demonstrates that there is obviously a great demand for opticians in this town and despite their size, power and brand awareness, Specsavers can’t service the whole market themselves. Finding out what the competition doesn’t do can create a market for new entrants.
But even with this model, it doesn’t have to be seen as a competition. Cypher, for examples, doesn’t support a lot of private client work. If a customer asks us about detailed inheritance planning, we recommend other firms who we know will offer a great service. Conversely if they receive complex ‘Xero’ requests, they know that is our sweet spot and kick things over the fence to us. While we are competing in some areas there is enough to go around, making it a very lucrative completion model.
A central theme for this successful philosophy is to understand who your target market is as well as who it isn’t and be comfortable with that choice.
Co-opetition is a bit of a buzzword in business. The portmanteau brings together cooperation and competition. Essentially, businesses decide to interact at some level because they have shared interests of reaching a higher value proposition. Samsung’s decision to sell Apple its new Super Retina edge-to-edge OLED screen for the iPhone X is a good example.
Apple has an extremely loyal customer base so are comfortable selling a product that is half Samsung and however much people find out that the whizz-bang tech screen, which is the selling point, is made by Samsung Apple fans don’t really care. if you’re willing to camp out at the Apple store to get the new I-phone, you won’t move, so Apple are comfortable in their own skin, they realise where their limitations are- and how to benefit from a little co-opertition.
The other benefit for Apple is that the money that Samsung make from Apple goes back into R&D which helps the Samsung products improve. Apply helps keep the supply chain healthy and the cumulative marketing efforts ensure the demand for smart products continues to grow.
Another example is in the car industry. Toyota, Peugeot and Citroen all combined to create what Peugeot call the 107. They shared R&D, shared parts, badge it up and market the product differently but have effectively all saved millions in NPD to get the car to market.
Give the customer what they want
There is a shift in power- consumers and clients are more informed, they know they have choice – Amazon has demonstrated that in spades. Rather than fight it, accept it and use it to your advantage.
Sky now includes Netflix and Prime in its packages. Sky know that consumers don’t just want a Sky TV dish, they have other viable options, so to make it easy for the consumer – and to retain a healthy percentage of the market spend Sky enables you to pay your Netflix subscription through your Sky package. It’s why Microsoft gave TEAMs away to compete with Slack.
In this blog based on a Mind Your Business Podcast episode, Alan and I tried to introduce the idea of completing rather than competing. It’s an alternative philosophy to the binary ‘us v them’ scenario. It is a way of coming to market despite large competition. We tried to demonstrate that some of the biggest companies in the world in the software, automotive and broadcast sectors have become the best of frenemies to make it easier for the consumer to choose both options. They know consumers can choose to go elsewhere, so facilitate their choices rather than block them.