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

JP Morgan India Equity Fund Online

Invest JP Morgan India Equity Fund Online     JPMorgan Mutual Fund   has announced dividend under the following schemes:   The record date has been fixed as March 17, 2016.   Scheme Dividend ( R /unit) JP Morgan India Equity-D 0.18 JP Morgan India Equity Direct-D 0.18                         ----------------------------------------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saving Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in india for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Franklin India TaxShield 4. ICICI Prudential Long Term Equity Fund 5. IDFC Tax Advantage (ELSS) Fund 6. Birla Sun Life Tax Relief 96 7. DSP BlackRock Tax Saver Fund 8. Reliance Tax Saver (ELSS) Fund 9. Religare Tax Plan 10. Birla Sun Life Tax Plan Invest in Best Performing 2016 Tax Saver Mutual Funds Online Invest Online Download Application Forms For further informa...

Inflation Indexed National Savings Securities - Tax Treatment

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)   Inflation Indexed Bond - Tax Treatment Tax treatment on interest and principal repayment would be as per the extant taxation provision. The quoting of Permanent Account Number (PAN) mandatory for investment amounting to `50,000 (Rupee fifty thousand) and more. However, following exemptions with regard to PAN requirement will apply: As per Income Tax Rule 114B, any person who does not have a PAN and who enters into any specified transaction shall make a declaration in Form No.60. As per Rule 114C, the requirement of PAN is not applicable to the person who has agriculture income and does not have any other income provided he makes a declaration in Form 61, non-residents as referred to in Section 2(30) of the Income Tax Act, and...

Change in Fund Manager for some of HSBC Mutual Fund Schemes

Buy Gold Mutual Funds Invest Mutual Funds Online Download Mutual Fund Application Forms Call 0 94 8300 8300 (India) However, this facility is only available to Unit holders who have been assigned a folio number by the AMC.   HSBC Mutual Fund has announced that the below mentioned schemes shall be managed by the new fund managers as stated in the table. The effective date will be July 02, 2012.   Amaresh Mishra 's will be Vice President and Assistant Fund Manager. Having done a Post graduate diploma in Business Management and Bachelor of Chemical Engineering, he has over seven years of experience in Equities and Sales.   Mr. Piyush Harlalka's designation shall be Vice President- Fixed Income. Qualified as a C.A., C.S. and holding M.B.A.( Finance degree), he has over six years of experience in Fund management and ...

DSP BlackRock MidCap Fund

Best SIP Funds Online   HOW HAS DSP BlackRock Small & Mid Cap Fund PERFORMED? With a 10-year return of 14.61%, the fund has outperformed both the category average (12.34%) and the benchmark (10%) by a good margin. Should you invest in DSP BlackRock Small & Mid Cap Fund? This fund invests predominantly in mid-cap stocks but takes a sizeable exposure in small-caps as well. The focus is on nascent companies with high growth potential. The fund manager places emphasis on quality and avoids inferior businesses even if these look tempting from a valuation perspective. Over the past year, the fund portfolio has grown, having added to some of the underperforming sectors like chemicals and healthcare. Its portfolio churn has come down significantly. The heavily diversified portfolio is run completely agnostic of its benchmark index— most bets are from outside the index—which can at times lead to bouts of underperformance as seen in the recent years....

Investing in Birla Sun Life Emerging Leaders Fund Series Online

  Buy Birla Sun Life Emerging Leaders Fund Series Online       Market volatility has opened doors to yet another opportunity for your customers. Here's your chance, once again, to ensure they capitalise on it! The current situation!   Earning trajectories of Small and Mid-cap stocks have shown an uptick across broader markets. (Source: MoSL).   A rise in disposable income has brought about a noticeable shift in the spending habits of the consumer. The pick-up in real urban wage growth has reported to be the fastest in 7 years (Source: RBI, Labour Bureau).   According to the 7 th Pay Commission, a staggering 24.8 million Government employees to be given a sizeable hike (Source: GoI, Spark Capital).     Birla Sun Life Emerging Leaders Fund - Series 7 (A Close ended Equity Scheme). With a tenure of 3.5 years and an aim to primarily invest in Small and Mid-cap stocks, it targets to identify the potential leaders of tomorrow.       Mutual Fund investments are subj...
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