"Businomics Blog" - 1 new article
Is there a small competitor about to clean your business’s clock? Will your sales be Amazoned, iPhoned or Ubered? Is there a Leicester in your league?
The Leicester City Football Club just won the Barclay’s English Premier League, the world’s top soccer league. Over the years they have bounced back and forth between the Premier League and minor leagues. (In England the worst teams are relegated to a lower level and the best teams are promoted to a higher league.) Leicester have been playing since 1884 and this is their first championship. (The English refer to the team in the plural, so they write “Leicester have ….”)
At the beginning of the season, bettors and pundits predicted victory by one of the perennial favorites: Arsenal, Chelsea, Manchester City or Manchester United. Leicester City was doomed to another relegation to the minor leagues according to the experts. Under the category “surprises,” Barney Ronay of The Guardian wrote, “The Premier League doesn’t do surprises.” He predicted Leicester would “probably” by relegated.
And now Leicester is on top. Surprise.
This reminds me of the building supplies dealer who told me that contractors would never buy from Home Depot. Of the fight for cellphone dominance between Nokia and Blackberry.
You can’t run your business worrying about every start-up in every garage, but you can wonder what would drive your customers to an alternative supplier. Try to ignore current structure of the market and ask what the customers or end-users really want to accomplish. Are there other ways to achieve those goals or aspirations? Is there an off-the-wall approach that just might work?
Upstart competitors have an easier time than ever today. Capital needs for startups are lower. New technology allows companies to test the market with small production runs, and globalization enables foreign competitors to more easily enter you market. (These forces are explained in more detail in The Flexible Stance.)
The possibility of new competition should be considered in developing strategic plans. Key risk areas can be identified and contingency plans developed. The failure to do so is most often due to executive hubris: the belief that management knows what will happen in the future.
The key lesson from Leicester City and successful business startups is humility. The top experts on English soccer mostly put Leicester in the bottom three places in the league, with optimists predicting a 15th place finish. The fans of Leicester City are today celebrating total victory, and the rest of us should be looking over our shoulders at what other forecasts could go wrong.