top of page
  • Justin Wright

When competitors attack

All markets are competitive, increasingly so, but sometimes, competitive actions can have such an impact that they bring to mind the words of legendary anchorman Ron Burgundy, “Boy that escalated quickly. I mean, that really got out of hand fast”.

In the past three months, we have worked on 3 different challenges in 3 different sectors each on behalf of a multi national business looking to respond to ‘extraordinary’ competitive pressure.

Commonly, competitive pressure is characterised as uneasy co-existence and at-a-distance observation, like sharks on a reef. Even in markets where there is a limited number of players – for example, duopoly markets like credit cards, soft drinks or beer, players can compete without knocking lumps off each other by pursuing alternative market participation approaches. Head on confrontation is avoided by each focusing on different category sub sectors, geographies, target audiences etc. A combination of self preservation and a fear of mutual destruction seems to preserve the peace, even if that peace only ever has a sense of transience.

What we found interesting about these three recent projects, is that each represented a different type of competitive challenge but in all of them, planning a coherent response seemed quite tough. The 3 different scenarios can be summarised as follows:

Type 1: The Classic Match Up (big player vs big player)

In this instance, the uneasy peace was broken by one big player aggressively going after an emerging market opportunity by deploying a new technology. When things are finely balanced, a big sudden move like this can mean that all hell breaks lose. The race to be first and biggest means that the “usual” rules go out of the window. The challenge for the slower of the two behemoths is how to best tackle the faster counterpart - to go head to head or try and disrupt via alternative ways to participate and get ahead? Here disruption can look attractive but is often harder to do than say.

Type 2: David vs Goliath (big global player getting attacked by a smaller specialist local player)

Here our global client was getting turned over by a specialist, smaller and highly aggressive player. This could be a local company or a more focused business that has to win this particular battle.  These sorts of companies might well have different margin expectations and are often family or privately owned. This means they have the twin advantages of swift decision making and aggressive pricing (and sometimes a lower cost base). In more than one instance, we have seen these structural differences coupled with aggressive sales and commercial practices. In reality, this can manifest itself as trash talking the big corporate for being greedy and distant, combined with very aggressively priced deals and even morally questionable business practices. Big companies are often quite vulnerable to this type of attack– like Goliath they can be confused, slow to react and feel that they are not in a fair fight. The response choice is: copy the tactics of the smaller competitor, crush or even buy them, or alternatively, rise above it all and hope that the benefits of scale and reputation win through.

Type 3: The WTF?! (big player getting surprised from leftfield)

Big dominant players can get caught cold by a new-to-market entrant. This is the scary one. It happens less often but the impact can be catastrophic as outsiders ignore the orthodoxies and often find a different kind of asset base or world view. It’s in their interest to disrupt - think Uber, Airbnb and Spotify. It can be argued that in this scenario, prevention is better than cure. Businesses that lose sight of their customers needs and frustrations are most susceptible here. Disruptors gain ground because they deliver something which customers want and which incumbents are failing to deliver. It’s always better to disrupt one’s own business than have someone else do it for you!

Planning for and responding to these different types of competitive threat is core to our Stretchonomics framework. We regularly conduct Competitor Teardowns to help ensure the actions of others do not disrupt the Stretch plans of our clients, and if the last few months are anything to go by, we might expect to see more of these challenges in future.

Being prepared requires :

  • the right strategy, but one that can be adapted and flexed based on the changing competitive landscape.

  • the right amount and type of resource to support the response plan

  • the necessary curiosity and external focus to ensure the threats are detected early enough

  • the intelligence and insight to fully understand the nature of the threat

  • the creativity to out think the competition rather than just out muscle them

  • the courage and hunger to take on the fight in the first place and then stick with it until the threat has subsided

And because things do have a habit of escalating quickly, planning your response in the heat of the moment is usually difficult and delays your response. Much better to have a plan up your sleeve to deploy as soon as the threat is detected.

For more information on how we apply our Stretchonomics thinking to conducting competitive teardowns visit our website.

Our latest book, Stretchonomics is available to buy on Amazon.


Certified B Corporation
bottom of page