EconomyWritten by Emre Tuncbilek On 08 August 2011
Three Disastrous Competitive Strategies to Avoid

We all have a strategy to survive. It determines how we work, why we start or end our relationships, it shapes everything we do. Your strategy is either determined proactively by your deliberate choices, or by the environment that surrounds us in a rather reactive way. If you think you don’t have a survival strategy, then the chances are that you belong to the latter group.

We don’t really have a choice, either we come up with a strategy for ourselves or others (friends, parents, employers, competitors, etc.) do it for us.

The same rule applies to competitive business strategies. Your competitive strategy refers to how your company competes in a particular business. Regardless of size, every business owner should be concerned with how a company can gain a competitive advantage through a distinctive way of competing. Effective competitive strategies often result in a competitive advantage which is unique to a particular organization and is difficult to imitate and not substitutable.

This week, we cover three very common but equally disastrous competitive strategies.

1. “Me Too” Strategy
It is simply saying “I have the same product too,” or “I can do that too.” This strategy involves watching what your competitors do, and then either copying them or one-upping them. It is a common and seductive strategy because it’s easy and safe. It may lead to incremental improvements occasionally, but it is not a sustainable strategy in the long run. In fact it is the best thing to do if you want your business to fade out in the market. Besides, it’s just as likely that you’re imitating an expensive tactic that didn’t work for your competitor. In either case, you will never lead your market by following the competition.

Therefore, please stop chasing your competitors. Chase your customers.

2. “New and Unique!” Strategy
Just because your business model or the product is new and unique, it doesn’t guarantee success. In fact this is one of the most common mistakes made by startup companies. Every business wants to be new and different; so many business owners equate innovation with novelty. They think if they introduce something new — something that nobody else offers — they will differentiate themselves and capture attention. But what’s new isn’t necessarily valuable or better than the alternatives.

This may sound like a contradiction with recommendations about the first strategy, so let’s clarify. The first strategy is simply about paying attention to what your customers want, rather than what your competitors are doing. Number 2 leads into this; if it is something your customers want and you can build it better – despite not being original – then don’t worry about originality and just go for it.

It is not the idea, but the execution that matters. In fact, few business breakthroughs are actually new:

  • Apple didn’t invent the graphical user interface, digital music player or smartphone. They vastly improved on existing products.
  • Google didn’t invent the search engine.
  • Nintendo didn’t invent the video game.

Therefore, newer isn’t better. Better is better.

3. “We Have the Latest Technology” Strategy
This strategy involves making a list of feature ideas or technologies, and then designing your websites or products around them. This is one of the most common differentiation strategies. Technology seems to be associated with innovation; which is a false perception.  Innovation may come from using the latest technology, but latest technology does not necessarily mean innovation.

Designing products based on feature lists or idea lists may lead to unsatisfactory experiences because those lists aren’t oriented to the perspective and needs of your customers. It is highly possible that you are not representative of your customers. In fact, the majority of your customers don’t care about features and technology. They just want products that are useful to them.

Therefore, design your business around people, not technologies or ideas.

Sources: UX Mag, ISC, Harvard Business Review
Images: HLC, Sunshine6gregosuri,

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About Author

Emre has a diverse work experience including IT consulting, sales force coordination, analytical/predictive reporting and operations management. He has an IT background, BA degree in Business Administration and earned his MBA degree in 2011. Currently, he takes part in various consulting projects and assists graduate level marketing and consulting courses at HPU. He is looking for opportunities for developing cloud based CRM systems, CRM analytics and social media integrations. (www.etunch.com)

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