Three Reasons You Need to Forget Rivals and Focus on Innovation and Value Creation

Every strategy consultant will tell you it is foolish to create a strategy that doesn’t position against rivals. I say, you should be more concerned about your customers than competitors.

We give you three reasons for this.

1. The Industry is in Constant Flux

Your competitors themselves are competing in an environment that is in a constant state of flux. Political, economic, social, technological, legal, and environmental shifts can have all rivals struggling to survive. The firm that innovates to generate the greatest customer value will extract most value and profitability in any condition.‬

2. Competitive Advantage is a Superior Source of Profitability

We need only look at Apple and Tesla to see how a firm can innovate and create value for customers to achieve wild levels of profitability despite stiff global competition.

If you don’t focus on innovation and value creation, and customers have choices between competitors, they will drive prices down, and your profitability with it. Your only way out is to innovate and create customer value to maximize differentiation and cost advantages.

3. Customer Only Think of What’s In It for Them

The danger of focusing on what the competition is doing is you lose sight of what the customer wants.

The customer, not the competition, is the greatest determinant of how much industry value and profit your firm can generate.

Get this, while you’re busy looking at the competition, the competition listening to, and strategizing to satisfy, the customer. You might as well shift your focus on how you can innovate and create value the customer wants and is willing to pay for.

If you want to get off the comparison-competition wagon, leverage innovation and value creation to create a unique position that attracts (rather than chases) customers who would be willing to pay a premium to access your products and services.

🔸 What’s been your firm’s focus? The competition or customers?

🔸 How has that worked for you?

🔸 Need help designing a customer-focused strategy?

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