Start making your competition irrelevant.

So many great products and services created by companies such as yours have become commoditised.  Did you set out for this to happen?  No way!

The rate at which the new value created by products and services is commoditised has increased dramatically, thanks to technological advancements in the way we do business and the purchasing behaviour of consumers.  Supply now outstrips demand in many markets that are actually contracting; creating price wars and obliterating profit margins for many involved in the value chain.

The implications are that as traditional markets get increasingly overcrowded, the prospect for growth and prosperity seems gloomier than ever.  Did you realise that many of the traditional methods of strategic analysis that companies use to compete, nearly always point to that very fact i.e. there is limited opportunity for growth if we continue doing the same thing.  But still we march forward to face our opponents head-on in a bloody war of attrition.  However, to win in the future, companies must learn to stop competing with each other.

Imagine the possibilities if your business was able to operate in uncontested market space where the competition was irrelevant because they didn’t exist.  Many companies are now achieving this by using a different approach to strategy.

This different approach to strategic thinking is called Value Innovation.

 

Instead of analysing the existing competitive environment as the benchmark for how you and your industry will move forward, the focus is to create a leap in value for potential new customers that will propel your business into a new and emerging market space.  The leap in value is achieved by placing equal emphasis on creating value and the process of innovation.

So what’s your first step towards freedom?

Central to the concept of Value Innovation is the development of a Strategy Canvas.  It is a diagnostic tool that helps to understand what elements of the customer offering (i.e. current value) everyone is currently competing on and consequently, where competitor money is being invested (i.e. current process of delivery).

The result of a Strategy Canvas is the creation of a Value Curve for you, your competitors and your industry.  Next is to build into your offering a set of alternative values and to reconstruct how that new message of value will be delivered, to an as-yet untapped set of customers willing to pay for your new competitive offering.  This is your unique Value Curve.

The successful companies of tomorrow are using the tools of Value Innovation today and will capture the opportunity of high profitable growth by creating new demand in uncontested markets.

For companies that are seeking a solution to the fight for competitive advantage, I recommend reading and implementing the tactics explained in Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne and published by Harvard Business Review Press.