Competitive Myopia

Many companies claim they don’t have competition. That’s public bravado and promotional license. Their CEOs know better.

But, managements that genuinely believe they have no competitors are short-sighted. They are living in a world that, sooner or later, will deliver a nasty surprise.

There is always competition: known and unknown; dangerous and benign; indirect and direct; current and yet to emerge.

A firm might have the upper hand on a competitor now (e.g., 17 years if it has a patented drug that is the only effective treatment for a disease.) But patents don’t last forever; neither does competitive advantage.

Every company has competitors:

Those known to it who compete directly with a similar (or perhaps identical) offering.
Those over whom it holds a competitive advantage that enables it to satisfy a need of target customers much better than its competitors. Competitors, however, may have markets for whom their offering represents competitive advantage.
Those whom they’ve yet to come across, who are working quietly and investing seriously to come up with an offering that may upstage the incumbents.
Those who are working on a game-changer that will redefine the market, leaving current participants scrambling to react.
All the other firms in all the other industries who compete for a share of every buyers dollars.

Competitive myopia – either arising through denial, or from not keeping a careful eye on external developments – can be the undoing of a company. No company has an impenetrable moat, an infinite product life cycle, or either regulatory or divine protection from interlopers that goes on forever. There are no guarantees.

There are, though, three things that can be done to remain competitive.

Be vigilant. Keep your eyes and ears on the market – especially if you hold a leading share and enjoy competitive advantage. The more attractive a position you hold, the more attractive your market becomes to new entrants and upstarts. As Intel’s Andy Grove believed in choosing the title for his 1999 book Only the Paranoid Survive, it pays to look over your shoulder
Strive to keep your customers for life. Recognize that attempts to displace you by others is inevitable. Do no hunker down and merely protect your customer base. Innovate to find improvements – even disruptive ones. It is better to defend your customer base by being the master of the new, rather than the protector of the old.
Embrace change. Operate a culture that thrives on change, rewards risk-taking, and prizes agility and execution. When a new competitor emerges, as it will, if all else has failed, you will be in a better position to press the reset button.

Written by Michael

Michael Douglas has held senior positions in sales, marketing and general management since 1980, and spent 20 years at Sun Microsystems, most recently as VP, Global Marketing. His experience includes start-ups, mid-market and enterprises. He's currently VP Enterprise Go-to-Market for NVIDIA.