 "Know your competitor")
THINKING IN NEW BOXES: FIVE ESSENTIAL STEPS TO SPARK THE NEXT BIG IDEA
AUTHOR: Luc De Brabandere and Alan Iny
PUBLISHER: Random House
Price: Rs 599
ISBN: 9780812986365
It's easy to err when thinking about who your true competitors are and what sets them apart from you (and you apart from them). Consider, for a moment, PepsiCo and the Coca-Cola Company. Do you see these two companies as competitors? How many times have you been to a restaurant and had a server indicate to you that the restaurant carries either Pepsi or Coke, but not both? If you consider these two companies to be competitors, though, you're only partially correct. It is true that in markets around the world, they compete in selling their respective carbonated and noncarbonated beverages-for example, Pepsi, Tropicana, Gatorade, and Aquafina versus Coke, Minute Maid, Powerade, and Dasani.
In reality, though, while Pepsi is perhaps Coke's primary competitor, Coke is not PepsiCo's primary competitor. Beyond beverages, PepsiCo owns and operates the global Frito-Lay and Quaker brands, along with a portfolio of foods that also includes dairy and hummus. Revenues from PepsiCo's food business account for nearly 50 percent of its more than $65 billion in annual revenues, while Coke's $47 billion in revenues is essentially from drinks alone. As a result, PepsiCo is focused on winning in a broader range of strategic areas affecting its many brands. Ask top executives at PepsiCo and they'll emphasize that as one of the leading consumer product companies in the world, its mission is to captivate consumers with the world's most loved and best-tasting convenient foods as well as beverages.
Much like gathering consumer insight, developing competitive intelligence entails trying to transcend preconceived notions. Perhaps there are things you believe about your most obvious competitors - they have inferior (or unbeatable) products; they are poorly (or very impressively) managed; they are ruthless, or they are vulnerable; they will always be bigger and stronger, they will always be smaller and more nimble-that may affect the way you view them. Rather than staying locked in these sorts of perspectives, we believe it can be much more interesting, and much more fruitful, to view the competition with the curiosity and open-mindedness that someone completely new to the industry - or a child - might bring!
If you change the framework you use to identify who your organization is, its mission and vision - and what you see as its core products and services - how would this alter the identity of its competitors? What competitive space can you define that would make its market share five times smaller? What would make it five times greater? Imagine that in seven years your main competitor were an entirely different organization in some entirely distinct industry - for example, you provide information technology services and your competitor is suddenly Hertz; you manufacture and distribute pet food and your competitor is soon Costco; or you own dairy farms across New England and somehow Staples, the office supply store, becomes your leading competitor - how could this have happened and what would those circumstances mean for your organization?
As you begin to consider such questions (and are forced to think more inductively), we suspect you'll begin to see that your future competition could very well come from unexpected directions and players.
As an executive at Ultragames, how could you redefine your firm's competitive space? Rather than merely providing video game services for young males, the company could be seen as providing education and entertainment services for a wide range of groups. Imagine if the company's main competitor, five years from now, was not Video Games Galore, but Cineplex movie theaters, or Major League Baseball... How could this have happened? How could these radically changed perspectives on 'the competition' help you 'fill in' the boxes of video games and entertainment with new product and service ideas appealing to families?
Now, instead imagine that you are an executive at a major camera manufacturer and you're trying to determine the competitive landscape for your company. Who is likely to come up with the next winning idea in photography? Who will invent the next big thing and then innovate the leading products and services? Let's get even more specific: Who do you think would be likely to come up with a new theory pertaining to how light is captured by a camera? And who might use that to create a camera that could take a picture that you could then focus or refocus (on the camera or later on your laptop) depending on which part of the picture you wanted to emphasize? Imagine, too, that these same "shoot now, focus later" images could subsequently be viewed and printed in both 2-D and 3-D formats. Who would you think not only developed the theory behind this new photographic approach but is now marketing these game-changing cameras? Would you guess Canon or Nikon? Kodak? Sony? The correct answer is Lytro, a small, privately held California-based firm. Lytro's revolutionary approach to imaging is based on the pioneering work of scientists at Stanford, and the company is already marketing and selling its category-busting Light Field Camera to enthusiastic early reviews.
AUTHOR: Luc De Brabandere and Alan Iny
PUBLISHER: Random House
Price: Rs 599
ISBN: 9780812986365
It's easy to err when thinking about who your true competitors are and what sets them apart from you (and you apart from them). Consider, for a moment, PepsiCo and the Coca-Cola Company. Do you see these two companies as competitors? How many times have you been to a restaurant and had a server indicate to you that the restaurant carries either Pepsi or Coke, but not both? If you consider these two companies to be competitors, though, you're only partially correct. It is true that in markets around the world, they compete in selling their respective carbonated and noncarbonated beverages-for example, Pepsi, Tropicana, Gatorade, and Aquafina versus Coke, Minute Maid, Powerade, and Dasani.
In reality, though, while Pepsi is perhaps Coke's primary competitor, Coke is not PepsiCo's primary competitor. Beyond beverages, PepsiCo owns and operates the global Frito-Lay and Quaker brands, along with a portfolio of foods that also includes dairy and hummus. Revenues from PepsiCo's food business account for nearly 50 percent of its more than $65 billion in annual revenues, while Coke's $47 billion in revenues is essentially from drinks alone. As a result, PepsiCo is focused on winning in a broader range of strategic areas affecting its many brands. Ask top executives at PepsiCo and they'll emphasize that as one of the leading consumer product companies in the world, its mission is to captivate consumers with the world's most loved and best-tasting convenient foods as well as beverages.
Much like gathering consumer insight, developing competitive intelligence entails trying to transcend preconceived notions. Perhaps there are things you believe about your most obvious competitors - they have inferior (or unbeatable) products; they are poorly (or very impressively) managed; they are ruthless, or they are vulnerable; they will always be bigger and stronger, they will always be smaller and more nimble-that may affect the way you view them. Rather than staying locked in these sorts of perspectives, we believe it can be much more interesting, and much more fruitful, to view the competition with the curiosity and open-mindedness that someone completely new to the industry - or a child - might bring!
If you change the framework you use to identify who your organization is, its mission and vision - and what you see as its core products and services - how would this alter the identity of its competitors? What competitive space can you define that would make its market share five times smaller? What would make it five times greater? Imagine that in seven years your main competitor were an entirely different organization in some entirely distinct industry - for example, you provide information technology services and your competitor is suddenly Hertz; you manufacture and distribute pet food and your competitor is soon Costco; or you own dairy farms across New England and somehow Staples, the office supply store, becomes your leading competitor - how could this have happened and what would those circumstances mean for your organization?
As you begin to consider such questions (and are forced to think more inductively), we suspect you'll begin to see that your future competition could very well come from unexpected directions and players.
As an executive at Ultragames, how could you redefine your firm's competitive space? Rather than merely providing video game services for young males, the company could be seen as providing education and entertainment services for a wide range of groups. Imagine if the company's main competitor, five years from now, was not Video Games Galore, but Cineplex movie theaters, or Major League Baseball... How could this have happened? How could these radically changed perspectives on 'the competition' help you 'fill in' the boxes of video games and entertainment with new product and service ideas appealing to families?
Now, instead imagine that you are an executive at a major camera manufacturer and you're trying to determine the competitive landscape for your company. Who is likely to come up with the next winning idea in photography? Who will invent the next big thing and then innovate the leading products and services? Let's get even more specific: Who do you think would be likely to come up with a new theory pertaining to how light is captured by a camera? And who might use that to create a camera that could take a picture that you could then focus or refocus (on the camera or later on your laptop) depending on which part of the picture you wanted to emphasize? Imagine, too, that these same "shoot now, focus later" images could subsequently be viewed and printed in both 2-D and 3-D formats. Who would you think not only developed the theory behind this new photographic approach but is now marketing these game-changing cameras? Would you guess Canon or Nikon? Kodak? Sony? The correct answer is Lytro, a small, privately held California-based firm. Lytro's revolutionary approach to imaging is based on the pioneering work of scientists at Stanford, and the company is already marketing and selling its category-busting Light Field Camera to enthusiastic early reviews.
Reprinted with permission from Thinking in New Boxes by Luc de Brabendere and Alan Iny, Random House
| "We must always doubt the way we see things" |
| To thrive in a world of constant change, creativity is not just important but it has to be sustainable. How should organisations inculcate this in their workforce? Even those who we think of as inherently creative - Mozart, Einstein and the like - had to work hard at it. Regardless of one's base level, there is definitely room for more. We run a wide range of workshops and trainings for our clients and even for BCG consultants on bringing more creativity to the workplace. It's not just about coming with ideas for new products and services - a core concept in Thinking in New Boxes is that the key to creativity is changing one or more of our existing mental models, a process which should always start by identifying and doubting some of our existing ones (as opposed to jumping straight into a brainstorm without any preparation, which usually leads to frustration). Creativity is just as relevant in organisation design, cost-cutting and rethinking process flows as it is to business model innovation and growth strategy. There is a wide range of cognitive biases that affect our mental models. How should we identify these biases? Our instincts usually lead us in useful directions, and indeed many companies have spent years and decades trying to replicate the way the human mind works. But sometimes our instincts lead us astray, which can be costly: doubt is the answer. We must doubt that the way we see things is the only possible way; doubt that the way we traditionally interpret trends, customer research and the world in front of us is the best way. It is only through a dose of doubt, i.e. challenging the traditional approach to getting things done, that real change and creativity become possible. How can we transcend our preconceived notions when developing competitive intelligence? For competitive intelligence, doubting your preconceived notions is critical - and the best way to start is by identifying what precisely they are. What are the assumptions you make about your competitive set - what if it were narrower, or broader? What if your competitor's motives are not the same as yours? What are the assumptions you have always made about your competitors that are ready to be refreshed? Only once you've begun to identify some of these issues can you truly doubt them and come up with useful new boxes to replace them. |