Michael Porter, the Competitive Analysis guru states “Beware of the Buzz”
How many times in the last decade have you heard about the next big thing in your industry?
An idea or new market entrant which is going change the way we do things?
The many “Dot-com” companies who came, saw off people’s money and failed dramatically?
Some were surprise failures but Porter states that they failed to take into account the “switching costs” or as the cool young things at the Dot-com time described as “stickiness”
The issue with companies we come across, especially web based SMEs, is that the owners put so much time, money and passion into their big idea the assume people will love it as much as they do.
Most are not so naive to really believe this if they sat down and really thought about it rationally but certainly subconsciously they may act as if this is the case.
All their customers have to do especially on line is type another address.
They have next to no emotional attachment to your product certainly compared to the owner.
Porter states that companies can build barriers against existing rivals and other outside forces.
Companies must understand and have a consistent strategy to become more profitable than their competitors.
This as any good MBA knows these strategies are the ability to differentiate themselves to create more profit, they sell at low cost and/or they focus on a specific market/geographic niche where there are less competitors or price pressures.
The secret of course is having a better strategy than your competitors and then getting on with it.
What are your competitors strategies?