No company can become a market leader by sheer luck. Every market leader deliberately designed superior strategies that gave them the upper hand.
If you keep doing what every organization is doing, you will keep generating the same result. Those who join secret cult in order to make money are simply too lazy to generate uncommon strategy.
Few years ago, Procter & Gamble entered South Korea and became the king of the sanitary towel market within a short period of time. They did not become the market leader by sheer luck. They simply engaged in an in-depth study of the sanitary towel market, gathered data, and designed a unique marketing strategy based on the data, and took a sizable chunk of the market share.
Jack Welch, the former CEO of General Electric shared this interesting experience about strategy. “A case in point is what happened in our medical business in 1976. The British company EMI had invented the CT scanner in the early 1970s, forcing the traditional X-ray manufacturers– Siemens, Philips, Picker, and GE into an intense equipment war.
Soon enough, all of us were coming out with million-dollar machines six months apart, each claiming to be thirty seconds faster in scan time than the last entry.
No one was particularly happy with this situation. The CT competitors were in a slugfest, and our customers–the hospitals–were frustrated that they had to make big capital outlays for technology that could be outdated within a year.
Seeing that dynamic, Walt Roob, the head of our medical business, and his team, came up with a breakthrough idea. GE would allocate its resources to design scanners that could be continually upgraded with hardware or software that would cost less than $100,000 a year.
We would sell our machines by saying, “Buy a CT scanner from our Continuum Series, and our upgrades will keep you from becoming obsolete for a fraction of the price of new equipment.”
The Continuum concept changed the playing field. It made us No. 1 and kept us there for twenty-five years.”
Almost every business leader that call our organization complain about one thing–competition. They complain that competitors are taking away their customers on daily bases. Of course, you must have competitors, but the question is, how will you compete?
If GE kept doing what their competitors were doing in the CT scanner business, they would have struggled like others. But they were smart enough to generate unique strategy to beat their competitors and it worked.
Any time we are conducting training for corporate leaders, we usually tell them that they are knowledge workers. Their job is centered on generating strategies and profferring solutions to challenges. If you cannot generate solutions to challenges you are not qualified to become a business leader.
Sometimes You Compete, Sometimes You Divest.
In one of our CEO Success Summits, I told business leaders that they should not compete blindly. If you are manufacturing cement for example, and your capacity is like one tenth the capacity of Dangote Group, please don’t compete. Trying to compete with a company that has billions of dollars to fight is like a bicycle trying to compete with a trailer.
It happened to GE. Japanese companies had rapidly commoditized businesses where GE had reasonable margins like TV sets and room air conditioners. GE ended up playing defense in a loosing game. Their quality, cost, and service–the weapons of a commodity business–weren’t enough in the face of declining prices.
Despite GE productivity improvements and increasing innovations, margins were eroding, as competitors like Toshiba, Hitachi, and Matsushita were relentless.
At this point, according to Jack Welch, GE came up with a strategy. He said, “Our strategy was much directional. GE was going to move away from businesses that were being commoditized toward businesses that manufacture high-value technology products or sold services instead of things.
As part of that move, we are going to massively upgrade our human resources–our people–with a relentless focus on training and development.”
By the time Jack was made CEO, he said that he knew that GE had to get as far away as it could from any business that smelled like a commodity and get as close as possible to the other end of the spectrum.
To achieve that, GE divested from businesses like TV sets, small appliances, air conditioners, and a huge coal company.
They invested heavily on GE Capital, bought RCA, which included NBC; and poured resources into developing high-technology products in power, medical, aircraft engine, and locomotive businesses. That was how General Electric survived and thrived.
If the horse is dead, bury it and move on. There is no law anywhere that said you must die in a particular line of business. That you have been there for many years doesn’t matter. If the horse is dead, don’t strategize on how to ride a dead horse, bury it and move on.
Change is difficult, but you can’t thrive if you hate change. That is why you need to enrol into Thrive Executive Coaching Program, where I will unveil practical strategies on how to navigate through change, overcome competition, become market leader and thrive effortlessly.
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