Glam rock duo Sparks unwittingly stumbled upon a critical business strategy issue in their 1974 anthem ‘This town ain’t big enough for the both of us’. Lest we forget:
Sustainable competitive advantage arises from:
1. Differences between firms, not similarities. Thus, if you are in close proximity to a competitor in terms of products, services, geography and so on, one strategic option is to create a difference that creates space between you. This may of course mean that you compete better. It may simply open up the market in ways that means everyone can gain share.
2. Foresight is better than hindsight. In order to know before the competition is going to head you off at the pass, we need dynamic approaches to strategy, rather than static use of models, which tell you ‘what happened’, rather like driving a car using the rear view mirror. One such approach is ‘Scenario modelling’ which we have used to help companies pre-empt decisions by competitors with impacts measured in millions. Read more about how this can be done at Strategy.
3. What do you do when your competition is too close for comfort? Well, you could collaborate – This can take many forms, from joint ventures, partnerships etc. In extremis, buy your competitor if the market is big enough to sustain the result.
What else can music teach us about business strategy? Share your thoughts here. I’ll leave you with a little teaser in the form of Queen’s ‘One Vision, One Mission’ clearly a song about focus or, as Tom Peters puts it ‘Sticking to the knitting’: