The ongoing stream of news about the gradual economic recovery may be tempting business leaders to start to breathe a sigh of relief. That would be a mistake. As markets improve, the level of competition tends to increase, not reduce.
In any market, being number one or number two is vital to gaining the scale and profile that generates profitable growth. So, if you are stuck in the pack, or worse, and have the possibility of more competition in the months and years ahead, what can you do about it?
One option is to redefine your market so that you can become the market leader. Take these examples:
- Following its launch in the mid-1980s, Ryanair became a struggling also-ran airline on routes between Ireland and London. It was only when the company brought in Michael O’Leary, and redefined its market to being Europe’s leading low fare airline, that its growth and its profitability took off.
- When Steve Jobs returned to run Apple in the late 1990s, he faced a personal computer business that had been out-gunned by Microsoft. Since then Jobs has transformed Apple from a niche player, focused on dedicated Mac users, to a global powerhouse that has created an ecosystem of providers and partners that is dedicated to bringing the best digital-based products and services to everyone.
- Over the past decade, Waitrose has redefined its market from affluent towns in the South East of England, to being the number one high quality food retailer in the UK, challenging M&S’s dominance.
To redefine your market for growth, you must first challenge your existing assumptions. For example:
- Are you currently limited by your assumptions about geographical reach (Waitrose)?
- The products and services you offer (Ryanair)?
- The types of customers you are targeting (Apple)?
- The technology you will deploy?
- Your exisiting operational capacity and capability?
The second stage is to develop what-if scenarios for potential new market assumptions. Identify what new opportunities (and risks) could emerge from these changes, and determine the fit of your existing capabilities with these potential business ideas.
If new capabilities are required, what options exist for building them? For example, Apple has used third parties to create the systems that underpin many of its products and services. Most revolutionary, the company has generated a new industry focused on the development of iPhone applications.
Similarly, Waitrose is partnering with Boots the Chemists to give it the reach for its new convenience offer.
You need not be trapped by your existing market definitions. Redefining your market may be the catalyst for driving step-change growth for your business, enabling you to become number one.
