Innovation in Value that Makes Competition Irrelevant
Struggle to provide value and a way to overcome it. How to look across complementary offerings?
The amount of content produced and published on the internet every day is constantly growing causing a decrease in average consumer attention. The only way to capture shrinking consumer attention is to produce value yet doing so can represent a very difficult time.
In a digital economy, producing value is essential for any type of business but there is no formula for providing value to customers, whatsoever. What can be done instead is exploring businesses that manage to not just create value but also hit the so-called sweet spot of value innovation that makes competition irrelevant.
In this article, we will go over two practical examples of businesses that were successful in producing value and give you some tips on how you can achieve the same.
Making Competition Irrelevant
Making competition irrelevant comes down to the blue/red ocean comparison. The key argument presented in the book Blue Ocean Strategy is the misconception of competition inside certain marketplaces. In other words, businesses are trying to divide and capture a piece of existing demand to succeed hurting each other, ultimately, and creating an ocean “full of blood”, a red ocean.
What businesses should do, instead, is focus on escaping existing market boundaries, innovate, and create new marketplaces with no competition. Oceans without blood, blue oceans.
How to Value Innovate?
The book offers numerous ways to go over marketplace boundaries. If you’re interested, I strongly encourage you to check it out. Here, however, we will focus on one way of doing so, looking across complementary product and service offerings.
One of the chapters contains the movie theater example. The perceived value of going to the cinema depends on numerous factors namely finding a parking spot or getting a babysitter if a couple has a child.
No cinema worries about babysitters but what they could find out is valuable information on what their customers do before, during, or after their product/service is used.
Michelin Star — The Practical Example
Owners of Michelin understood the logic of going beyond the boundaries of their marketplace. As one of the biggest tires producers they assessed what their customers did after using their product. They figured out that people travel and visit places, so they decided to give them possible destinations and reviews to encourage them to drive more and spend their tires faster.
Ultimately, restaurants and hotels were willing to pay to locate themselves higher on the list getting the company out of the poor sales performance and establishing what is known today as the Michelin Star.
What does It mean for You?
As stated numerous times, producing value is an essential part of every business’s success. Here are three tips from these stories that can help you produce value:
- Find an industry assumption believed by most actors within a certain marketplace and challenge it.
- Study the moves not companies. A huge leap in value produced is the outcome of a certain move regardless of the actor or industry.
- Think about what people do before coming and after leaving. Take a Medium article as an example. What intent reader have in mind when entering the platform and how leave it? What’s the role of your article in that sequence?
Thank you for reading 😇
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