As a marketing strategist, I often get a bird’s eye view of how high tech companies approach competitive strategy. It can be surprising to see how little “quality time” is allocated to a thoughtful analysis of the underlying drivers of the competitive environment, or assessing which moves are likely to lead to the best results. As a result companies fail to get the competitive advantage they seek, and over time fall prey to the forces of commoditization.
For high tech companies and business unit leaders, the two books outlined here provide concrete guidance on smarter ways to plot competitive strategy. With practice they can really help you step up your game, and increase your chances of securing a market leadership position.
5 Plays for Capturing & Keeping Market Share
John Zagula and Richard Tong are former Microsoft marketing gurus, now partners at a Seattle area VC firm, Ignition Partners. In The Marketing Playbook they share their insights on how to win leading market positions, even when entering a market arena dominated by much stronger players.
Their book describes how to apply each of 5 marketing strategy plays that have been perfected at Microsoft and proven elsewhere, including startups they’ve worked with at Ignition. They describe these plays, with real-world case studies, in The Marketing Playbook: Five Battle-Tested Plays for Capturing and Keeping the Lead in Any Market. The plays they showcase are:
- The Drag Race
- The Platform Play
- The Stealth Play
- The Best-of-Both Play
- The High-Low Play
Zagula and Tong also explain how and when to shift from play to play, how to assess industry conditions, timing, the market environment, and your own company’s capabilities and resources. Their writing is very accessible:
Picking the right play for any particular situation begins with discovering the gaps that represent the best opportunities in your overall industry. Doing homework on your industry will help you discern between a pothole, a challenging but manageable leap, and an insurmountable grand canyon. That homework can spell the difference between being lauded as a champion, being forgotten as an also-ran, or being scraped off the pavement as roadkill.
Predicting How to Win Via Disruptive Innovation
Seeing What’s Next can provide guidance on how to assess your competitive position and plan a market entry strategy when your company is contemplating a new product or service offering that will be a disruptive innovation.
This book introduces some conceptual tools to help pick the opportunities you’re most likely to win, the ones where you’ll face fewer (or delayed) threats from the established players. It can also help you predict which competitive situations are so fraught that your company risks turning into “roadkill” if you go head to head with the entrenched leaders.
Seeing What’s Next is the third book in the series on disruptive innovations by Clayton Christensen. In this book Christensen responds to readers’ requests for more concrete guidance on how to apply his theories of innovation to real-life business situations.
The book begins by recapping Christensen’s framework for identifying when a market opportunity may be ripe for disruptive innovation:
- Nonconsumers (people who aren’t buying or using the established companies’ products)
- “Undershot customers” (people whose needs or want aren’t being met by the incumbents)
- “Overshot customers” (people who feel they are paying too much for features they don’t need or don’t value)
Then Christensen explains how to assess competitors’ business models to see if they are likely to be motivated or capable of responding effectively to your disruptive innovation. (He refers to this as the “RPV theory” or method of analysis.)
Christensen’s RPV theory outlines a way for you to assess your competitors’:
- Resources: do they have the cash, capital, technology, people, products, IP, etc.?
- Processes: do they the capabilities and expertise to efficiently and effectively respond to this innovation, in ways that customers value?
- Values: when it comes time to allocate resources and priorities, will they want to respond to this opportunity or pay more attention to “other options on their plate?”
Zagula and Tong’s “stealth play” implies that market leaders remain unaware when smaller players target a market niche. Christensen has a slightly different take on this. It’s not that those competitors are oblivious to your threat — it’s that they either don’t care or can’t respond. Christensen explains how you can predict when established players will generally choose to ignore a disruptive innovation, with a framework for assessing when they lack the motivation or ability to respond. Here are some signals:
- When the newcomer appears to be pursuing a market that’s too small to appeal to the established companies.
- When the newcomer is attempting to serve customers that are unattractive or unprofitable for the incumbents to serve.
- When the business model employed by the newcomer is one that the incumbents can’t match.
What I like about both books is the way they provide a useful framework for helping marketers and strategists think things through, and apply a more coherent approach to competitive strategy. Once mastered, these approaches will really up your game — and increase your company’s chances of being a market winner.