Why Businesses are Now Competing Against the Unseen

“The ability to learn faster than your competitors may be the only sustainable competitive advantage.” (Arie de Geus)

...or here's another one for you; "If two people are being chased by a lion, they don't have to run faster than the lion. They just have to run faster than the other guy." And so it is with competition. Those who do a better job than the competition at attracting and keeping customers are the ones who will win. But some times we become so fixated on competing with those we can see, that we don't widen our focus enough to keep an eye on those we can't. It is much easier for us to spot our head-to-head competitors and aim to beat them. Coca-Cola have been kicking lumps out of Pepsi for years. McDonald's want to sell more burgers than Burger King. Apple are constantly at war with Samsung. But in recent times, many organisations have faced the stiffest challenges from competitors they couldn't see.


Nokia the Giant
I wonder do you remember the days when Nokia was global leader in the mobile phone market? (It will be interesting to see if Microsoft's decision to resurrect this once powerful brand will pay dividends.) If you are in your 20's you will no doubt say "really? Nokia?". Nokia was quickly overtaken by brands they failed to notice and recognise as threats. They focused on competing with other mobile phone manufacturers, when really they should have been keeping an eye on the likes of Apple and Samsung. 



The Kodak Story
Kodak's story is even more interesting. What was once one of the biggest brands in the world, in recent times has been in serious trouble. Kodak's global sales have fallen from about $19 billion in 1990 to around $2 billion in annual sales today. In that time, the company's workforce has been cut from 145,000 to about 8,000 today. The is largely due to the company's inability to gain a sustainable competitive advantage from what it had learnt (an unfortunate twist on the opening quote of this post). Kodak have been selling film camera technology at a time when the world has gone digital. The ironic thing about the Kodak story though is, it was Kodak that invented digital camera technology (in 1975) but decided not to launch it, a decision based on the threat the new technology would pose in cannibalising their existing business. What Kodak didn't realise was that other organisations, who they didn't see as competitors (Sony, for example), might also 'invent' this technology. By the time this happened and Kodak tried to react, it was too late.



Emerging Business Models
And then there are many examples of companies that are really struggling to compete with, what can only be termed, emerging business models. It really doesn't matter if HMV manages to sell more CD's than Golden Discs, if most of the world are buying their music on iTunes or streaming it on Spotify. It doesn't matter either how many free bags of popcorn Xtravision give with their DVD-movie rentals if most of us prefer to subscribe to Netflix or Apple TV. And I bet Eircom never even considered an alternative to fixed-line telephony before Skype was launched in 2003, creating a brand new business model and redefining global communications for one and all in the process.

Businesses are now not just up against competitors they can see, they are quite often competing with those they can't. Marketers need to start looking at things from their customers viewpoint and ask themselves, "how else could they solve their problems?". Could it be possible a fixated focus on your direct, head-to-head competitor will lead to a solution coming from the periphery that will render you both irrelevant? Let's hope not.

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