Skip to main content

Seven Moves To Beat Competition

In spite of their size, small and medium companies can beat the biggies. The need is to implement certain unconventional ‘opening’ strategies

CHESS is composed of three distinct phases: an ‘opening’, a ‘middle game’, and an ‘end game’. Successful players learn early that while logical methods help them win ‘end games’, these are entirely inappropriate during earlier stages of the game. Across every field studied – from chess to sport to music – scientists have confirmed again and again this fundamental dilemma: ‘What helps you win in the end is not what helps you start winning at the beginning’.

Yet in the field of business we seem to have missed this lesson. Like novice chess players, we tend to cling to logical methods. The business best seller list is stocked with books that deal only with ‘end games’. They show big companies how to play in mature industries with established players following accepted rules. You can summaries the lessons to the three-move playbook. To sustain their advantages, large companies can choose from essentially three non-exclusive choices.

1. Lock up customers: Microsoft, for example, leverages its large base of committed users to sell new offerings.

2. Lock up resources: Reliance Industries leverages preferential access to significant share of regional oil to maintain its competitive advantage.

3. Lock out competitors: Nearly all large global companies (Intel, Sony, Wal-Mart, etc.) seek economies of scale to achieve cost advantages that smaller competitors cannot match.

Small companies rarely enjoy large captive customer bases. Neither can they afford access to proprietary resources, nor match the scale of larger competitors. So how do small companies compete if the three most important sources of competitive advantage elude them? We know it is possible. Ten years ago, Nokia was 1/10 th the size of Motorola. Today it outsells the one-time leader. Hero was a bicycle company that knew nothing about motors. Now it is the world’s largest motorcycle producer.

Traditional strategy tools cannot explain how small companies overtake large ones; these tools nearly always give the odds to incumbent. The reason for this can be explained by any good Chess player: while incumbents are playing ‘end games’, attackers should be playing ‘openings’ and how you win ‘end games’ is fundamentally different from how you win ‘openings’. For example, Reliance Industries chose a creative ‘opening’ that put the establishment off-guard. It is through creative ‘openings’, not rigorous logic, that small companies can transform themselves into large ones.

A studied conducted to calculate the 100 most competitive companies of the decade: 100 publicly-traded companies from markets across the globe that triggered a decade-long period of abnormally strong growth, profitability and value creation. The list contains several breakthrough Indian firms including Infosys, Wipro, Reliance Industries and Hero Honda. It is found that size plays no meaningful role in your ability to overtake competition. What matters more is the size of your growth ‘playbook’. Using a well-tested set of thirty-six competitive plays, It is classified how each of the 100 most competitive companies of the decade accounts for its success. Through this exercise seven ‘openings’ emerged as most important for strategists seeking new growth. By studying these ‘openings’, you may begin to see new ways of unlocking disruptive growth and profitability.

1. Ally with a partner outside your market:

By partnering with a player your competitors classify as outside your market, you can catch your competition off guard. For example, the largest motorcycle company in the world – Hero Honda – was born out of such a partnership. 21% of the hundred companies I studied sited using this move.

2. Move early to the next battle ground:

By identifying when and how your market will evolve, you can establish a defensive position and wait for your competition to realize the future has changed. This ‘opening’ has established many of the world’s most dominant companies including Wal-Mart and Frontline Ltd, the world’s largest owner of oil tanker freighters. Another 21% of the companies sited using this move.

3. Lock up resources:

By identifying critical pinch points in supply, you can restrict your competitor’s access to resources thereby pre-empting their ability to resist your expansion. When Apple launches new products, it also depends heavily on this tactic. 17% of companies studied sited using this move.

4. Attack from two fronts:

By using one business to provide cover for another, you utilize a well-established principle of conflict; by forcing your competitor into a two-front battle you can win with greater ease. Virgin Airway’s success against British Airways and Starbucks’ dominance over coffee shops across the US are examples of this scheme at work. 16% of companies studied sited using this move.

5. Introduce a new piece to the game board:

By creating a new entity you can disrupt competitive dynamics in your favour. Because your competition is often thinking only about current industry players, ignoring possible new ones, you may take your competition by surprise. Reliance Industries grew from a one-man fabric trading company to India’s largest conglomerate by repeated application of this strategy. 13% of companies studied, grew by applying this move.

6. Coordinate the uncoordinated:

Your strength is less a function of the assets you own than that of the elements can call into formation. By organizing independent players into a coordinated front, you can simulate greater power with less investment. Wikipedia and open source software are good examples. 13% of companies analyzed have applied this move.

7. Embrace what others abandon:

When your market abandons something – an old business model, technology, etc. – you can take advantage by adopting it. As the market has moved on to something more ‘new’, they may hesitate to return thereby affording you an advantage. RIM’s Blackberry was born from this counter-intuitive tactic. 13% of companies analysed sited using this move to some degree.

Popular posts from this blog

ICICI Pru Mutual Fund Dividend

ICICI Prudential Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( Rs /unit) ICICI Pru Capital Protection Oriented Ser V Plan B-D 0.03611325 ICICI Pru Capital Protection Oriented Ser V Plan B Direct-D 0.03611325 ICICI Pru Balanced Advantage Direct-DM 0.06 The record date has been fixed as February 08, 2017. ------------------------------ ------ Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 4 Tax Saver Mutual Funds for 2017 - 2018 Best 4 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. BNP Paribas Long Term Equity Fund Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGetRich on 94 8300 8300 ------------------------------ ------ Leave y...

What is Financial Freedom?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)     There were many things common between our Freedom fighters. All had the Single vision (Free India), common goal (independence) and had a disciplined and focused approach. They were ready to do anything and everything and had made so many sacrifices to see India free . But the road to freedom was not easy .They had faced lot many hardships, went to jail so many times and even confronted physical and mental torture from the British. There was one more thing which proved to be an advantage to our fighters that most of them were professional lawyers. The knowledge of legal issues and its impact on our country at large has helped them counter various bills and proposed new laws by the then government. It is due to their continuous effort that we are able to achieve the goal of Independent Indi...

Hidden Bank Fees

  What Banks Hide From Customers Imagine after a peaceful and exciting holiday you receive your bank statement with steep charges. You then rush to your bank and start confronting staff members and to your dismay, you come to know that the high end debit card was charged very heavily. Wouldn't this cause damage to your finances? So remember, the world outside is full of deceptive and double cheating people. Unethical practices are always used by company sales person in order to meet the target. Credit card companies, mutual funds and bank institutions always play dirty tricks to lure customers and the practices are rampant. So here's how you should be careful while dealing with your banks: High End Debit Card Charges While opening an account with a bank you opt for a debit card with minimal charges. But later on when you upgrade your card and opt for high end debit card the annual charge rise by a good amount. Though such a card has slew of features but it all comes at a high ...

Updating a minor PAN card upon becoming adults

  Updating a minor's PAN card once they become adults A PAN card issued in the name of a minor does not contain the minor's photograph or signature, and therefore, cannot be used as a valid proof of identity. Once a minor PAN card holder turns 18, the relevant changes must be made in the PAN records. A new card is then issued bearing a photograph and signature. Application The applicant is required to fill up the "Request for new PAN card andor changes or correction in PAN data" form. The form can be filled up online by accessing NSDL's Tax Information Network website and clicking on the online PAN application tab. Information The applicant must mention the existing PAN number in the application and check the `photo mismatch' and `signature mismatch' boxes, and submit the online form. The form must also be printed out, signed by the applicant, and submitted along with two photographs. Documents Identity and address proof in the form of a copy of the app...

Partial withdrawal from PPF

  Public Provident Fund (PPF) account has a lock in period   If you opened a PPF account to meet your retirement needs,, think twice about withdrawing from this fund before retirement. But provided it's an emergency here are the rules. Public Provident Fund (PPF) account has a lock in period before which you cannot withdraw your money.   The partial withdrawal is allowed after the completion of 6 financial years . This means that you will be allowed a partial withdrawal from 1 April 2017. The maximum partial withdrawal allowed is the least of the following: 50 percent of the account balance at the end of fourth financial year, 31 March 15 50 percent of the account balance of the end of previous financial year, 31 March 17.   There's a loan option available on your PPF account between the fourth and the sixth financial year. You can obtain a loan of up to 25 per cent of the balance in your account. However, this will attract interest of 2 percent more than the prevailing ...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now