Be grateful if your competitors went to a high class business school. Because rather than limiting your options as a competitor, their education in “smart” management may create some.
Sounds counter-intuitive no? But professional management is increasingly management by spreadsheet. Clayton Christensen described this trap in “The Innovators Dilemma Big companies run by people with top-tier MBAs are always trying to “optimize” and “improve productivity”. With that, there’s a tendency to focus on the best and most profitable customers and only the fattest market segments. That focus leads them to consistently ignore many good customers. Which in turn, can create great long term opportunities for you.
Christensen describes this phenomenon across many markets but I personally have recently seen it at work in the bicycle industry. Generally there’s been consolidation across the industry. Larger brands buying up smaller brands and moving the manufacturing offshore. They strive for mass distribution and market share across multiple price points.
Grumpy Old Men–Custom Bike Builders That I Admire
On March 3, 2006 , the North American Hand Made Bicycle Show will take over the San Convention Center. The exhibitors are more than sixty small builders who refuse to accept that the future of the bicycle industry is in large factories in Taiwan owned by corporate giants. I’ve met or talked to many of these guys and they are, in most cases, a bunch of grumpy old men whose charm can be elusive at the first meeting. They aren’t marketers and managers–they are craftsmen.
Instead of studying at high end business or engineering schools they served their apprenticeships in small manufacturing shops becoming experts at welding, metal working and painting. They have turned industrial skills into high art. And, rather than cut prices, they typically charge a premium.
I own bikes from two of these shops: a road bike from Brent Steelman and a touring bike from Co-Motion. What I love about them is that each of these bikes was built by people who care about them deeply and have a point of view about every component and piece of steel tubing on them. The other funny thing about these builders is that they care who buys their bikes. Not that they can afford to turn down customers that won’t appreciate them. But they like to know that the bikes they build are being ridden hard and well by people who appreciate them.
And if you judge by the traffic in New York’s Central Park, on the San Francisco Peninsula, and the Pacific Coast Highway among other places, there are plenty of folks who appreciate the skill of these builders and are willing to pay a premium price.
Look at your competitor’s strengths
Your competitors are slaves to their strengths. McDonalds is built around their grill and their deep fat fryer. Their whole system is anchored there. Hollywood studios are anchored to action movies, teen comedies and “chick flicks” because they can fill up the multiplexes. What are the strengths that anchor your competitors? What are they leaving on the table for you? I assure you, there’s plenty that they’ve left behind.