I've noticed something lately across my work - an increasing tendency for an intense and emotional reaction by executives to competitive activity. For the record, I fully believe in monitoring competitive activity and taking preemptive action or tweaking strategy when necessary. But getting so focused on blunting competitive activity that it delays or changes strategy can have an unintended and detrimental impact. It can lead to a brand that is less in control of its destiny, not more. I believe this to be particularly true for specialty retail, where our value proposition is so focused on the customer experience.
It seems to start within the nucleus of the company with C-level executives. Something happens regarding a competitor that catches them by surprise and, in their minds, it increases the risk of not meeting their goals to an unacceptable level. Can you blame them? None of us like to be caught by surprise, but this group’s added responsibility of delivering the next quarter's results makes the pressure tremendous. The consequences of reacting (or over-reacting) to a competitor's action are significant, as allocating resources away from an original strategy and toward a competitive issue can result in a significant impact on a brand’s perception and equity. Said another way, it may be focusing on winning the battle instead of the war.
Avoiding a “nuclear reaction” to competitors requires focus, discipline and a level head.
FOCUS - The last thing you want to do is fight a battle on someone else's turf. As a specialty retailer, some of your competitors are much larger and their scalability enables them to attack you on fronts such as price, efficiency or distribution. If you decide to react to these attacks, your odds of winning are low. Stay committed to the elements of your business model that make you special. Unparalleled customer experience. Product or service knowledge unmatched by competitors. Product or service uniqueness not available anywhere else.
DISCIPLINE - It’s hard not to succumb to the vagaries of competitive activity. Your responses should be selective and focused on protecting your core value proposition. Apple, for example, is the archetype for discipline. Love them or hate them, you still have to look at all the products and services they launched over the last ten years that were panned or that made competitors announce "[insert Apple product] killer" strategies. iPod. iTunes. iPhone. App store. iPad. Have they wavered? Not in the least.
A LEVEL HEAD - It may seem impossible, but as the cover to The Hitchhikers Guide To The Galaxy states: DON'T PANIC. The bottom line is, when we're stressed we just don't think as clearly. Step back and get some perspective about the issue and find a way to dispassionately determine the impact on your core value proposition. And don’t be afraid to seek different perspectives, which can often help you clarify the problem you perceive.
The next time you feel a nuclear reaction coming on over a competitor, consider these three points. Think through the business implications of a particular competitive activity and be the voice of reason. At the end of the day, a calm and well-reasoned decision will keep your specialty retail brand focused and winning the war on your turf.