That’s a quote from strategy guru Michael Porter of Harvard’s famed business school, one I think makes a lot of sense.
In my first year as a marketing consultant, I found that the biggest challenge I faced is that many clients resisted committing to a brand. Instead, they wanted to be everything to everybody. I understand the thinking – it’s an attempt to cast a wide net. But actually, if you try to speak to everybody, you end up appealing to no one.
Another scenario I came across more than once was a client who wanted to emulate the strategy of a competitor. Or a competitor might pursue something else, and my client will want to follow suit.
The honest truth is this: one of the worst paths to follow as a business is to battle with a competitor on their ground. For example, if you’re a hotel, you can’t emulate the strategy of the Four Seasons in some elements and the Holiday Inn in others. These are two very different extremes. If you are trying to be both, you are probably neither. There is no advantage in being average. Instead, focus on your own company’s strengths within the right industry, regardless of what the competition is doing.
When you’re doing something the same as the other guys, it’s called “destructive competition” because it leaves to escalation with lower prices and higher costs, unless one of the competitors happens to be incompetent.
Many companies focus on being “the best in their industry,” but the question is, what does that mean? “What is the best car?” Mr. Porter asks. “It depends on who is using it. It depends on what it’s being used for. It depends on the budget.”
The best solution is to focus on what you can be good at, and do it very well. For example, Porter Airlines, a commercial airline flying between major city centers, chooses to do so from the Toronto Island Airport, which is far smaller than the city’s Pearson International Airport, but which is located five minutes from downtown – unlike Pearson, which can be as much as an hour away from downtown if the traffic’s bad.
Porter is taking advantage of the preference of its customers for convenience, the airline has avoided the kinds of price wars that created other airline “wrecks” such as Roots Air, Jetsgo and Canada 3000.
Large companies have integrated this approach into their business models. For example, when Microsoft released the original Xbox, they created a brand that distanced itself from the Office productivity suite and the Windows operating systems. They knew that a gaming console would not be able to leverage from their existing brand, so they created something entirely new.
So if you’re sitting at your desk, trying to figure out what to do about the current economic climate, maybe you should determine what not to do as well.
