HOW CAN you utilize your strengths to gain a superior position in the marketplace? If you are starting out with a good product or service, and you see an opportunity to sell a lot of it at a good price and profit, you must then be sure that your competitors don’t see what you are doing and rush in to compete for the same customer.
It is a law of economics that whenever there are “above market profits,” competitors will rush into that marketplace to offer their goods and services. For example, in real estate markets, whenever a boom starts, individual entrepreneurs, without coordination with each other, rush in to build and offer more homes and properties. Soon, the market is oversaturated and the high prices that attracted competitors turn into low prices that often force competitors out of business.
Your competitors will enter into any marketplace where they perceive that there are above-average profits to be made. Everything that you can do to deflect their attention away from your potential or real profitability gives you a longer and stronger position in the marketplace.
If ever a competitor or someone you’re not sure about asks you how your business is going, always tell them that it’s a constant struggle. “The market is really tough today. We are fighting for every dollar.”
The first strategy when you enter into a potentially profitable market is to appear unworthy of attention. Appear to be too small and insignificant, and give the impression that you are going after a very small market segment.
Whether this was Apple’s strategy with the iPhone, I don’t know. But it might very well have been because its competitors dismissed the iPhone and ignored Apple’s marketing activities until it was too late. The second action is that, when you do achieve high levels of sales profits, don’t make big announcements or brag about your success until you are so far ahead of your competition that they can never catch you. Don’t wave a red flag in the face of a bull of aggressive competitors.
Many companies use the strategy of establishing themselves strongly in the market and then announcing that they are now so large, strong, and fully entrenched that their competition should go somewhere else. Sometimes this strategy is successful, and sometimes it is not, but the perception of suddenly achieving market dominance in a particular product or service offering will often cause your competitors to look elsewhere for sales and profitability.
Be secretive, especially with new product offerings or where you see tremendous market opportunities. Be as secretive as possible until you are ready to launch, just as Apple practiced almost obsessive secrecy before the launch of the iPod, iPhone, and iPad. When these products were launched, they sold many millions of units within a few months.
Apple has built a reputation for tightly controlling and protecting its internal information before the introduction of new products.
Using military strategy again, you don’t want your rivals to see you “assembling your armies.” This was a strategy practiced by Napoleon. By massing his forces in secret, he was able to win major battle after major battle in one of the longest and most successful military careers in history.
Napoleon would deliberately keep his army divisions separate and apart over a wide geographic area until he was ready for a major battle. He would then have all his divisions converge and mass simultaneously in a single place for battle. He would often consolidate his armies in as little as twenty-four or forty-eight hours, to the complete surprise of the enemy. When he offered battle he almost always had numerical superiority at the point of contact. He was able to overwhelm virtually every army of Europe because he was able to remain obscure until he was ready to reveal himself and launch his full army.
This should be the same with you. Keep your product and service development activities quiet. Act as if you are going about your regular business. Impose a blanket of secrecy on your new products so that your competitors have no idea what you are likely to do. In military terms, surprise is an essential strategy for great victory in the marketplace.
Look for ways to redirect the attention of your competitors away from your major products, services, and markets. If you have a high-profit product and low-profit products, when people ask you how business is going, redirect their attention to your low-profit, high-volume products so that your competitors begin to think that is where the market is, and that’s where they should be channeling their energies. Encourage your competitors to go after the markets that are least profitable for you. Remaining secret and private about your most profitable product areas is a key marketing strategy.
The natural tendency of many businesses is to blow their own horns, to brag about their market successes. They make loud public announcements about the areas where they are earning the highest profits. They wave the red flag in front of the bull and encourage their competitors to rush into those markets with their own products or services, even if the competitive quality is not as good. Eventually, their sales, profits, and market share decline. This is what happens when you encourage other competitors into your marketplace.