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April 08, 2005
Strategy and Open Source
Rob asks "Can a company compete when it's strategy is well known". He throws out the line
"But I keep thinking that if I ran a major company and had access to everything my competitors were doing, I could crush them with that information"
My thoughts:
- As he says, execution is more important than the ideas
- Most people will think that their competitor's strategies suck, and laugh at them, until/unless they succeed. (at which point, you'll have to play catch-up)
- Some people would ignore it - each business is different, leveraging different strengths and resources. (Just like software teams).
- By focusing on defeating their strategy, what you're really doing is being reactive.
The last one is important. Let's say that you're in competition with Company X, and they lay out their whole strategy:
"We're going to focus on making kitchen appliances for design-concious consumers. We'll focus on big box retailers, but avoid Wal Mart like the plague. We'll have a truck that we'll bring to major store openings, to show off our stuff. We'll use French designers, and Chinese labor. We'll focus on a 95% customer satisfaction rating. We will have a simple website, but not significant web store, instead directing users to our partners."
So, you're a competitor - how do you "crush" that strategy?
"Ha Ha Ha! You Fools! I will have two trucks that visit store openings, instead of just one! And, I will have a tremendous web presence that will attract millions of buyers. Now that you have laid your strategy on the table, nothing can stop me from defeating you."
I mean, really - Essentially all you are doing is valuing different options differently. Other than fundamentally unethical options I'll hire a hit squad to flatten all the tires on the truck in every city, what can you do to "defeat" this strategy?
The only thing I can think of is try to get into the big box retailers first, but given the decision cycles, that's not likely to happen. Maybe you could try to beat them to market, but then again, that's a matter of execution rather than fundamentals. And you run the risk of a rope-a-dope - they could put out an intentionally conservative plan, with the desire to lull their competitors into thinking "They won't have this on the shelf for another 6 months, so I can do it in 5", and then *surprise* their product shows up in 4.
Bottom line - don't be reactive. Focus on doing what you do best, instead of worrying about what other people are doing.
My opinion, anyways...
Posted by jb at April 8, 2005 07:35 AM
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