Musings of a Marketing Maven

As a mar­ket­ing strate­gist, I often get a bird’s eye view of how high tech com­pa­nies approach com­pet­i­tive strat­egy. It can be sur­pris­ing to see how lit­tle “qual­ity time” is allo­cated to a thought­ful analy­sis of the under­ly­ing dri­vers of the com­pet­i­tive envi­ron­ment, or assess­ing which moves are likely to lead to the best results. As a result com­pa­nies fail to get the com­pet­i­tive advan­tage they seek, and over time fall prey to the forces of commoditization.

For high tech com­pa­nies and busi­ness unit lead­ers, the two books out­lined here pro­vide con­crete guid­ance on smarter ways to plot com­pet­i­tive strat­egy. With prac­tice they can really help you step up your game, and increase your chances of secur­ing a mar­ket lead­er­ship position.

5 Plays for Cap­tur­ing & Keep­ing Mar­ket Share

John Zag­ula and Richard Tong are for­mer Microsoft mar­ket­ing gurus, now part­ners at a Seat­tle area VC firm, Igni­tion Part­ners. In The Mar­ket­ing Play­book they share their insights on how to win lead­ing mar­ket posi­tions, even when enter­ing a mar­ket arena dom­i­nated by much stronger players.

Their book describes how to apply each of 5 mar­ket­ing strat­egy plays that have been per­fected at Microsoft and proven else­where, includ­ing star­tups they’ve worked with at Igni­tion. They describe these plays, with real-world case stud­ies, in The Mar­ket­ing Play­book: Five Battle-Tested Plays for Cap­tur­ing and Keep­ing the Lead in Any Mar­ket. The plays they show­case are:

• The Drag Race
• The Plat­form Play
• The Stealth Play
• The Best-of-Both Play
• The High-Low Play

Zag­ula and Tong also explain how and when to shift from play to play, how to assess indus­try con­di­tions, tim­ing, the mar­ket envi­ron­ment, and your own company’s capa­bil­i­ties and resources. Their writ­ing is very accessible:

Pick­ing the right play for any par­tic­u­lar sit­u­a­tion begins with dis­cov­er­ing the gaps that rep­re­sent the best oppor­tu­ni­ties in your over­all indus­try. Doing home­work on your indus­try will help you dis­cern between a pot­hole, a chal­leng­ing but man­age­able leap, and an insur­mount­able grand canyon. That home­work can spell the dif­fer­ence between being lauded as a cham­pion, being for­got­ten as an also-ran, or being scraped off the pave­ment as roadkill.

Pre­dict­ing How to Win Via Dis­rup­tive Innovation

See­ing What’s Next can pro­vide guid­ance on how to assess your com­pet­i­tive posi­tion and plan a mar­ket entry strat­egy when your com­pany is con­tem­plat­ing a new prod­uct or ser­vice offer­ing that will be a dis­rup­tive innovation.

This book intro­duces some con­cep­tual tools to help pick the oppor­tu­ni­ties you’re most likely to win, the ones where you’ll face fewer (or delayed) threats from the estab­lished play­ers. It can also help you pre­dict which com­pet­i­tive sit­u­a­tions are so fraught that your com­pany risks turn­ing into “road­kill” if you go head to head with the entrenched leaders.

See­ing What’s Next is the third book in the series on dis­rup­tive inno­va­tions by Clay­ton Chris­tensen. In this book Chris­tensen responds to read­ers’ requests for more con­crete guid­ance on how to apply his the­o­ries of inno­va­tion to real-life busi­ness situations.

The book begins by recap­ping Christensen’s frame­work for iden­ti­fy­ing when a mar­ket oppor­tu­nity may be ripe for dis­rup­tive innovation:

• Non­con­sumers (peo­ple who aren’t buy­ing or using the estab­lished com­pa­nies’ products)
• “Under­shot cus­tomers” (peo­ple whose needs or want aren’t being met by the incumbents)
• “Over­shot cus­tomers” (peo­ple who feel they are pay­ing too much for fea­tures they don’t need or don’t value)

Then Chris­tensen explains how to assess com­peti­tors’ busi­ness mod­els to see if they are likely to be moti­vated or capa­ble of respond­ing effec­tively to your dis­rup­tive inno­va­tion. (He refers to this as the “RPV the­ory” or method of analysis.)

Christensen’s RPV the­ory out­lines a way for you to assess your competitors’:

• Resources: do they have the cash, cap­i­tal, tech­nol­ogy, peo­ple, prod­ucts, IP, etc.?
• Processes: do they the capa­bil­i­ties and exper­tise to effi­ciently and effec­tively respond to this inno­va­tion, in ways that cus­tomers value?
• Val­ues: when it comes time to allo­cate resources and pri­or­i­ties, will they want to respond to this oppor­tu­nity or pay more atten­tion to “other options on their plate?”

Zag­ula and Tong’s “stealth play” implies that mar­ket lead­ers remain unaware when smaller play­ers tar­get a mar­ket niche. Chris­tensen has a slightly dif­fer­ent take on this. It’s not that those com­peti­tors are obliv­i­ous to your threat — it’s that they either don’t care or can’t respond. Chris­tensen explains how you can pre­dict when estab­lished play­ers will gen­er­ally choose to ignore a dis­rup­tive inno­va­tion, with a frame­work for assess­ing when they lack the moti­va­tion or abil­ity to respond. Here are some signals:

• When the new­comer appears to be pur­su­ing a mar­ket that’s too small to appeal to the estab­lished companies.
• When the new­comer is attempt­ing to serve cus­tomers that are unat­trac­tive or unprof­itable for the incum­bents to serve.
• When the busi­ness model employed by the new­comer is one that the incum­bents can’t match.

What I like about both books is the way they pro­vide a use­ful frame­work for help­ing mar­keters and strate­gists think things through, and apply a more coher­ent approach to com­pet­i­tive strat­egy. Once mas­tered, these approaches will really up your game — and increase your company’s chances of being a mar­ket winner.