I was reading a recent article about the competitiveness of the ‘razor blade’ industry.
As you are probably aware, the dominant player (Gillette) has been losing market share to smaller producers for the past five or six years. The competitors have simply attacked the ‘Big G’s’ dominant market position with a different approach to getting a lower priced product to customers.
The article got me thinking (and smiling) about my past life, and how our senior management discussions (often heated) revolved around making a strategic choice; protecting margins or protecting market share.
As leaders, we have to make many decisions about strategy. We can look like a genius with the correct decisions, and we can look like a flaming idiot when we make the wrong decisions. What’s important is we make a decision. There are people in leadership positions afraid to make a decision.
Leaders who are not afraid to make strategic decisions are the ones who have remained close to their marketplace and customers. They have the confidence and courage to change their strategy in accordance with the needs of the changing marketplace.
The ‘razor blade’ marketplace battle, should remind all of us about the importance of not being complacent with a dominant position. Customer needs have changed and the ‘Big G’ moved to slow to meet those needs. They only saw the changing need when someone forced their hand.
My leadership tip for you this week is to never become complacent with your position in the market. Always, aggressively grow and protect your market share by being proactive not reactive.
A few helpful suggestions for you to consider if your focus is market share:
- Ask your team, what should we be doing to grow the business that we’re not doing?
- Ask your team, if you were our competitor how would you take market share away from us?
- Ask your customers, what is the one thing we could do to provide a better experience for you?
A few helpful suggestions for you to consider if your focus is margins:
- Ask yourself, if we lose market share, will we idle capacity, if so, can we afford to?
- Ask yourself, what value can we add that our customers are willing to pay for?
- Ask yourself, do I have the right team in place to execute on the strategy I choose?
There is so much more to say and do on this subject. What’s important for you to remember is not to lose sight of the importance of maintaining organizational clarity on pursuing margins or market share.
Let me know if you need a little help.