During my twenties and early thirties, I was an accomplished middle distance runner, winning some and losing more races on regional and national level in Germany and occasionally on an international level. Not surprisingly, during those days, I had a highly competitive mindset; it was always “me” against “them”, or “us” against “them” if we ran relays or team competitions.
Once I entered the business arena as a corporate banker for Deutsche Bank, my competitive mindset suited me well, helping me to win important deals and beating our key competitor institutions. Nowadays, as I have evolved into a Business Creativity expert, I have learned to appreciate that although a competitive mind is useful in certain cases and situations, it can dramatically limit your spectrum of strategic actions and responses. Today, let me share some thoughts taken from one of our strategic exploration tools, Market Fields Map, so that you may better master the dynamic, competitive environment that you do business in.
1. Know your market field. I started my sports career as a footballer, but was only able to compete at a higher level after I shifted over to running, which was more aligned with my true talents and strengths. However, here once again, I only started to win races and championships after I narrowed down my area of running (middle distance instead of long distance and marathon) and my main focus discipline (3000m steeplechase).
Likewise, in our highly competitive modern business world, those companies who pick their industries, industry niches or categories based on their strengths and passions are much more likely to enjoy greater success. Insofar, ponder what industry niche you compete in by answering the question: What business are we really in? For example, is Apple a hardware and software company? A computer company? Or maybe a digital lifestyle company? In a recent keynote address, the firm’s CEO Steve Jobs remarked that Apple is now the world’s leading digital devices company, thus indicating what competitive field he wants Apple to focus on in the coming years.
Lesson 1: Socrates reminds us: “Know thyself”. Clearly spell out the core market field (i.e. your industry niche or category) that you want to compete in. Our company THINKERGY is an innovation company. How about you? What market field are you competing in?
2. Know your wider market environment. Next, identify and list all related market segments that also compete for your customers’ wallets. What other market segments and niches are competing for the money that is spent on satisfying the same need that you address with your value propositions? e.g., in our case, this question translates to: “Who else competes for the dollar that companies spend on innovation?”
When you thus map out your competitive landscape, go beyond the obvious segments. What are more remote market fields? What are substitution segments? What new market segments have recently emerged on the periphery of your market environment? For example, open source has been an emerging market field that affects many industries beyond software.
Lesson 2: Gain a deeper understanding of your wider competitive landscape by making an effort to identify all related market segments that compete for the same dollar that your customer is spending on your value proposition.
3. Know the key players in each market field. Research and list the key competitors in each identified market field. Who is dominating each segment? Who else is an interesting or fast-moving company in each field? Gain an overview over the key players in each field of your wider market environment, get more information on each of those names, and ideally keep on tracking their market moves in regular time intervals.
Lesson 3: “Different fields, different grasshoppers; different seas, different fish,” goes an Indonesian proverb. You don’t need to know them all, but know the biggest, fastest and most interesting grasshoppers in your neighboring fields and fish in your adjacent seas.
4. Explore action alternatives that go beyond simple competition. Once you’ve mapped out your wider competitive landscape with all market fields that border to your own focus niche, and have listed the key players in each field, take time to review the big picture of your wider competitive market environment to find answers to the following questions: Who are your real competitors? Who are companies and market fields to compete with in some cases, and to cooperate in others? What are market fields with whom you could strategically cooperate in defined areas? And what are related market fields that may benefit from your value propositions and could be turned into a new client?
List all your thoughts and ideas to widen your array of strategic actions. For example, Apple and Microsoft compete in some areas and closely cooperate in others. With its iTunes Apps store, Apple turned software developers into allies to create more attraction for the iPhone and iPad, and provided a distribution channel for free and paid-for applications. At THINKERGY, we learned from our market fields map that half of the adjacent market fields that border to our market field “innovation companies” qualify as cooperation partner and/or potential client segment to better leverage the full value potential of our X-IDEA innovation method and toolbox in the future.
Lesson 4: “It’s a competitive world”, the 80s band Depeche Mode fittingly commented in their song “Everything Counts” roughly thirty years ago. Well, yes and no. Nowadays, strategy innovators have long transcended the concept of simple competition. In the dynamic business environment of the 21st century, view your wider competitive market fields not only through the narrow lenses of competition, but consider the full spectrum of modern transaction types that also comprises the concepts of coopetition, cooperation and even turning perceived “competitors” into your best clients.
© Dr. Detlef Reis 2010. This article was published in parallel in the Bangkok Post under the title “First know yourself, then master your wider competitive field” on 22 July 2010.