Business is’nt Always a Win-Lose Game

January 14, 2011 Leave a comment

I’ve written a lot of posts comparing sports to business. I’ve showed what you can learn from college football and how to embrace the role of David in overcoming Goliath…I’ve even compared marketing to being your business’ quarterback. I’m convinced that sports can teach us a lot about both business and life.

However, as I have come to realize, there is one glaring mistake with this comparison…in sports there is a clear winner and a clear loser. Always. That is why the game is played and there is no getting around it. But is the same true in business? Must there always be a winner and a loser? Is such an outcome inescapable?

In an interview with The Harvard Business Review, Whole Foods CEO John Mackey discusses this very concept:

I think it’s kind of deep in human nature to think in terms of the zero sum. If one stakeholder is winning, someone else must be losing. It comes from sports, where there is one winner and lots of losers, and this idea of a fixed pie, where if someone is getting a bigger piece, someone else has to be getting a smaller piece, and what’s needed for social justice is to make sure people get equal pieces. But a conscious business recognizes that you can have an expanding pie, and potentially everyone can get a larger piece.

I’ll give you a simple example: Management’s job at Whole Foods is to make sure that we hire good people, that they are well trained, and that they flourish in the workplace, because we found that when people are really happy in their jobs, they provide much higher degrees of service to the customers. Happy team members result in happy customers. Happy customers do more business with you. They become advocates for your enterprise, which results in happy investors. That is a win, win, win, win strategy. You can expand it to include your suppliers and the communities where you do business, which are tied in to this prosperity circle. A metaphor I like is the spiral, which tends to move upward but doesn’t move in a straight line.

Brand and business owners should strive to think in more cooperative terms.

Sure, there is always going to be a place for competition, because, let’s face it, competition brings out the best in a brand (Coke/Pepsi, Microsoft/Apple). However, you need to define your “competitors”. It’s one thing to play a win-lose game with someone who is competing with you for shelf space…it’s quite another to play this zero-sum game with your strategic partners, suppliers, employees, or customers.

Building a network of collaborative partnerships expands the value created, as well as the value captured for all stakeholders. The sum is greater than the parts.

Filed under Business, Competition, Strategy Tagged with , ,

Nokia: Success Can Be Your Brand’s Greatest Obstacle

September 29, 2010 Leave a comment

The best defense is to be consistent and stand for something, whereas the best offense is to find contradictions and exploit them.                 –Mao Tse-Tung

Let’s take a trip back to the year 2000. Reality TV dominated television sets, *NSync and Backstreet Boys dominated the airwaves, and Nokia dominated the mobile phone market.

By the turn of the millennium, Nokia had a 32% share of the U.S. mobile handset market. (with a 35% share as recently as March 2002) During this time, the cell phone maker was rolling out one masterpiece after another, offering phones that were cutting edge, reliable, and easy to use. Nokia was the de facto cell phone brand, a classic market leader.

Fast forward to year 2010 and Nokia is struggling mightily in the U.S. According to comScore, its market share dipped to 8.1% in April.

So what went wrong?

It is quite simple actually — Nokia became a victim of success. I would contend that success has led to more damage to leading brands than recessions and scandals — combined. The reason is this: after reaching the pinnacle of becoming ‘market leader’, many brands get conservative. They no longer play to win; rather they play not to lose. And they stick with the same old playbook despite the fact that the game is changing all around them.

This conservative mindset led to a complacent and risk averse Nokia. They failed to anticipate changes in consumer tastes and missed out on opportunities such as flip phones and Qwerty-keyboard business phones.

In some instances, Nokia showed glimpses of its former cutting-edge self, creating an “iPhone-like” prototype in 2004. However, the brand was again crippled by their conservative mindset as described in the New York Times article below:

A few years before Apple introduced the iPhone, research engineers at Nokia prepared a prototype of an Internet-ready, touch-screen handset with a large display, which they thought could give the company a powerful advantage in the fast-growing smartphone market.

But management worried that the product could be a costly flop, said the former employee, Ari Hakkarainen, a manager responsible for marketing on the development team for the Nokia Series 60, then the company’s premium line of smartphones. Nokia did not pursue development, he said.

“It was very early days, and no one really knew anything about the touch screen’s potential,” Mr. Hakkarainen explained. “And it was an expensive device to produce, so there was more risk involved for Nokia. So management did the usual. They killed it.”

Now, not all hope is lost for Nokia. They are still the world’s largest manufacturer of mobile with a global market share of 36.6% according to a recent IDC report and have been able to offset their decline in the U.S. with growth in China, India, and elsewhere.

However, the company has to get back that fire that propelled them to the top. It’s certainly not going to be easy, but it can be done. IBM did it, Coca-Cola did it, and Sears is trying to do it.

Nokia is hoping that their iPhone alternative, the long-awaited N8 touch-screen phone, provides the spark for this fire.

Filed under Branding, Category Development, Strategy Tagged with , ,

Hampton Inn Defies Industry’s Dirty Little Secret

September 21, 2010 1 Comment

For as long as I can remember, whenever I check into my hotel room my priorities are

  1. Throw the comforter on the floor
  2. Adjust the air conditioning

I’m by no means OCD about germs, but it doesn’t get much more disgusting than an unwashed comforter that has been “used” by many, many strangers.

Is this idea that hotels don’t wash their comforters (and sometimes sheets) true or is it just a myth?

It doesn’t matter. The fact is that most consumers believe that hotels don’t wash their bedding. And perception is reality.

Hampton Inn is capitalizing on this misconception by guaranteeing a clean and fresh bed.

From their website

“Linens and duvet* are washed fresh for every guest. You’ll rest easy on our premium pillow-top mattress with plush comforter, crisp white duvet and your choice of comfy pillows.”

What amazes me is that it took this long for a hotel chain to address this nasty problem. The fact is, however, Hampton isn’t the first chain to offer fresh bedding. I’m sure a dozen other chains have been doing this for years.

The difference is that offering fresh bedding was business as usual for these other chains. They failed to look at the marketplace and place themselves in their customer’s shoes. Kudos to Hampton for recognizing this misconception and creating a point of differentiation in a commoditized industry.

*A duvet is a cover that goes over the comforter. While this doesn’t fully correct the problem, because the comforters still aren’t being washed every day, it does keep the outer layer of the comforter germ free.

Filed under Competition, Marketing, Strategy Tagged with , ,

Go Where Others Won’t, Win without a Fight.

August 7, 2010 Leave a comment

Win without a Fight

— Excerpt from Selling the Invisible: Sam Walton’s brilliantly profitable strategy for Wal-Mart was to go where no sane competitor like Woolworth or Kmart would dream of: to towns that seemed too small to support a large discount store. In 1962, Sam opened his first store in tiny Rogers, Arkansas. Two years later, he christened his second store in Harrison, Arkansas, population 6,000. He opened six more stores before he finally opened a store outside Arkansas, in little Sikeston, Missouri.

Walton claimed these towns and their surroundings for himself, and his domination in these areas produced the profits that fed Wal-Mart’s growth into more and bigger communities. Just thirty years after opening that first store in Rogers, Sam Walton died. He was America’s richest man, and his company was America’s largest retailer.

Wal-Mart’s story offers a priceless lesson about strategy (especially to MBA’s, myself included). Competitive strategy isn’t nearly as important as non-competitive strategy. You read that right…it’s not that competition isn’t important, it’s that brands who focus on beating competitors often end up beating themselves. They are focused solely on their competition and their industry, prompting a myopic view that literally puts handcuffs on their brand.

We must heed the advice of Sun Tzu and beat competition without a fight. The way to do this is to do what they won’t and go where they aren’t. Follow in the footsteps of Wal-Mart, Netflix, H&M, and Southwest Airlines.

Filed under Competition, Positioning, Strategy Tagged with , ,

Take the Blinder’s Off Your Brand

May 21, 2010 Leave a comment

When you are fighting for your brands survival out there on the battlefield, it’s so easy to put the blinders on and focus solely on your opponents. You are so focused on out-thinking, out-flanking, and out-executing your competition that you completely lose sight of what your fighting for —the customer.

Sure, paying attention to the competitive landscape is important, but that alone is not going to lead to success for your brand. Is there any brand that has become a success solely because they are eco-friendly or offer product varieties for the latest fad diet?

Of course not! But you wouldn’t know it by looking at many brands who have been putting all of their resources into trying to keep up with the competition and the latest fads. However, the fact is this…the great brands focus very little on competition and very much on the consumer.

Starbucks: Thrived at a time when competition thought that coffee café’s were dead; focused on creating a experience for the customer.

Nintendo Wii: Became a sensation by appealing to the “non-gamer” market, instead of continuing in a technology focused war with Microsoft and Sony.

Hyundai: With a consumer-centric marketing program, the carmaker’s sales increased by 47% from August 2008 to 2009 — even though total industry sales were up only 1%.

Filed under Branding, Competition, Focus, Strategy Tagged with , ,

← Older posts

Follow

Get every new post delivered to your Inbox.