The Organizational Strategist

March 16, 2011

Wisely choose your market approach to thereby choose your competition


-Introduction-

Finding the right market space to compete in can be enabling or disabling based on the environment and your strategy.  By filling a niche that makes an organization well known through its great products or tapping into a previously unrealized market need with an aptly created service, large scale success can be gained.  Conversely, entering into a space that is highly contested, with seasoned competitors who have large resources at their disposal, can make your strategy futile.

-Compete on your turf, with your terms-

If a strategy is chosen that duplicates another strategy, the resources available for use then become an area to compete over.  This is especially crucial when resources are hard to come by.  It can also be inherently limiting to copy or emulate another organization’s strategy.  The limitation can be due to boundaries being set on where or how to move forward, a lack of focus, or by being perceived as the same as other options.

For instance, I have heard that Tully’s has sought out to be the alternative coffee to Starbucks.  With that approach, it is going after the locations that Starbuck’s chooses not to go.  While this is, in a way, a focused strategy, it makes it so that Starbucks gets to choose the best locations and options.  Tully’s then is known as the second best and will likely always have Starbucks looming over it.  Having Starbucks always on top makes it so that Tully’s is limited in its own growth and enablement. 

Another example would be social networking and social navigation sites.  Facebook, Friendster, Orkut, Myspace, and other sites are largely driven by popularity and friend-based social relationships.   The more popular one of these sites is, the more influential it is and the more market share it holds.  In these situations, the user’s time is, for the most part, the resource that they compete over.  It may be that a given person has one or more accounts on some or all of these sites.  However, the time spent per site is less likely to be equally divided.  If all of these sites offer the same content, then a user would most likely just want to go to wherever his or her friends are.  That means that the ‘best’ site is the most popular one.  That also means that as one site grows, the others will see their usage shrink. 

To overcome such challenges, shift your strategy to play by your rules, your strengths and your best opportunities. This often means specialization or choosing to compete in specific areas, but not others.  When an organization makes wise decisions and hones their products and services to optimally deliver to their chosen customers, it positions itself for success.  Going with the Tully’s example from above, there is an element of success since Tully’s could be the go-to place for the locales Starbucks chooses not to go to.  This helps make Tully’s known and thereby promotes its products.  With the social networking and social navigation sites, customizing functionality to deliver value for unique aspects can help.  LinkedIn is a good example of such a site because it is built around professional networking.   With that clarity, it enables users to go there for that express purpose.  Myspace is a site that could shift its efforts to retain user’s special interests.  If it devoted itself to enable music evangelism and promotion as its specialty, it could harness its functionality that many other sites do not offer. 

-Moving onward-

Strategy is different based on your organization and the environment around it.  However, many of the strategic fundamentals remain when choosing what to pursue and what not to pursue are very impactful.  As you set your path forward, make your strategy clear, powerful, and known throughout your organization so you can derive the outcomes you seek.  The world is always awaiting the next killer app or fantastic offering; you just need to make strides to deliver it.

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2 Comments »

  1. A well thought out high level analysis, I found the social network discussion particularly enlightening in that Facebook, Linkedin, and Friendster, all cater to different demographics that while overlapping their distinctive purposes mimic the real world analogies to clubs, Facebook (Create your own social club), Linkedin (Your business club), Friendster(Your adult Club). It reveals there may be a much larger set of niche markets in social networking than originally thought.

    What are your views on leveraging your personnel’s inherent skills to determine your market entry point?

    Comment by Gerald — March 17, 2011 @ 11:12 am

    • That is a great and challenging question to answer simply. Often times strategy is evolutionary and intended to be built upon over time. The current personnel’s skills and efforts may not suffice to match the intended strategy or may require adjustment to align to the strategy. What could be done is to examine the skill base using a traditional SWOT (Strength, Weakness, Opportunity, Threat) and compare that to the various market spaces, niches, or marketing aspects (5P’s) that you could utilize. If there are clear strengths that show promise in the market, that would be an easy match. The positioning and approach would very much depend on the industry and mix of personnel’s inherent skill set.

      Comment by Whit — March 17, 2011 @ 11:20 pm


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