Thursday, March 6, 2008
You Too Can Be A Giant Killer
If you operate in a market where there are one or two prominent players - perhaps many times larger than you are - it's very easy to get into the mindset that all you can do is chip away around the edges rather than take them on head-on. The natural assumption is that if you do take them on head-on either they will simply wipe you out with predatory pricing or the like or that you need massive amounts of finance to be effective to do so. Its then very easy to convince yourself that it's simply too risky and a lot safer to stay as you are.
Well it's not true! the secret is to not only be bold but also innovative and, as Michel Robert put it in his book Strategy Pure & Simple", force the competitors to play in your sandbox rather than playing in the theirs.
To illustrate the point lets have a look at three European companies that have each grown from nothing to major players in industries where there where massive, dominant successful competitors such that they now have those competitors seeking to play in "their sandbox". The three companies are Red Bull, King of Shaves and Virgin
Red Bull is an Austrian company its product of the same name is marketed as a "high energy drink (in fact it has just twice the caffeine content of normal colas and the same as a cup of coffee) and is sold in cans significantly smaller than their behemoth competitors Coke and Pepsi.
Red Bull was formed in 1984 after Dietrich Mateschitz and Nina Avery travelled to Thailand and saw that the tuk-tuk (rickshaw) drivers drank a substance to keep them energized throughout the day. After some alterations to the recipe, and a flavour modification for the public, Red Bull was born.
Now over 2 billion cans are sold each year in over 120 countries and both Coke and Pepsi have developed me-to products
What Red Bull have succeeded in doing in a remarkably short period of time is to take on and beat - certainly in terms of contribution - two of the biggest brands in the world. That is something that most of us would think impossible or at least we would have only been possible by undercutting on price. In fact the reverse is true, Red Bull is considerably more expensive that Coke or Pepsi.
Have a look at this comparison of the price per gallon of various liquids in the USA:
Milk $3.79
Evian water $6.40
Coke $8.20
Budweiser beer $8.88
Red Bull $30.69
If we assume that the production cost of Red Bull and Coke to be similar we then get an indication of the simply stunning profitability of Red Bull.
Whats stopping you from doing the same?
You may not yet have heard of King of Shaves but, believe me, you will!
By far the dominant player in shaving products is Gillette followed by Wilkinson Sword and this again is a market where most of us would say you must be mad to attempt to take on either of these world leaders head-on - but that's exactly what Will King did in the UK in late 1992.
- and now one King of Shaves product is sold every 7 seconds from 30,000 stores world-wide!
In 1992 Will King created the shaving oil product that was to become the bedrock of the company. Alongside his girlfriend Ann, he initially worked from their back bedroom, selling King of Shaves Original shaving oil which he created after getting razor burn from shaving with conventional foams or gels. He hand-filled the first 10,000 bottles over the kitchen sink and in 1993, got the product listed by Harrods and Boots the Chemist.
King of Shaves specialises in shaving and skincare software platforms for men and women, offering a number of shaving and skincare solutions ranging from the original natural essential oils to the low foam aloe based AlphaGels, the Kinexium silicon technology advanced shaving range, the silicon enhanced Proshave range, the new ASC2 antibacterial and DSC products and the recently enhanced and redesigned King of Shaves Woman range with multi-benefit shaving gels, the original and cult Express Shaving' and VanishHair 'Shave Minimising' spritzes plus a fabulous leg toning moisturiser. Autumn will also see the debut of our first 'Skinvestment Series' range of 'skincare in shaving' products, designed for use with today's high performance, multi-bladed shave systems.
King of Shaves is now the #2 'shaving software' brand (by sales & volume) in the UK, and is widely acknowledged as one of the most successful brands in the fast moving men's grooming market place. It continues to grow in the USA too, with the brand now listed in over 20,000 stores across the USA and won the FHM USA's 2005 Annual Grooming Awards for 'Best Wet Shaving Product'. King of Shaves is also available in Australia, Zealand, and Holland.
Im sure youll agree a remarkable, and unfinished, success story.
Whats stopping you from doing the same?
Finally Virgin. If you haven't read Richard Branson's autobiography "Losing my Virginity I commend it to you.
Love him or hate him what he and his remarkable team have managed to do is to create a brand that is inherently trusted by a vast range of people - having started with the music industry he's then gone into airlines, mobile phones, financial products, cosmetics, trains and many other markets. What other consumer brand would you trust so highly that you would give them your money to invest if they decided to go into financial services?
When Virgin first moved into the airline business in the UK by far the dominant player was British Airways and it is now the stuff of legend that the then Chairman of British Airways, Lord King, dismissed Virgin as a serious competitor simply because Richard Branson wore a jumper to work, not a suit! - A classic case I think of sitting in the Room of Contentment in the Change House model in my book!
Indeed applying the Change House model to Virgin you have to agree that they have been very successful at constantly staying in the Room of Renewal and from there challenging and beating dominant, entrenched players in one market after another - it truly is very impressive.
So what's this got to do with you?
Your markets are different arent they? - Well I don't believe they are - the simple message I would give you is one that you've heard from me before:
You must be very good at what you do or, these days, you simply would not be in business.
If you are very good at what you do then get you shoulders back, believe in yourselves, work very hard on a compelling "new sandbox" strategy,
- and go for it!
© 2006 Roger Harrop
Fan Football Liverpool Site
Well it's not true! the secret is to not only be bold but also innovative and, as Michel Robert put it in his book Strategy Pure & Simple", force the competitors to play in your sandbox rather than playing in the theirs.
To illustrate the point lets have a look at three European companies that have each grown from nothing to major players in industries where there where massive, dominant successful competitors such that they now have those competitors seeking to play in "their sandbox". The three companies are Red Bull, King of Shaves and Virgin
Red Bull is an Austrian company its product of the same name is marketed as a "high energy drink (in fact it has just twice the caffeine content of normal colas and the same as a cup of coffee) and is sold in cans significantly smaller than their behemoth competitors Coke and Pepsi.
Red Bull was formed in 1984 after Dietrich Mateschitz and Nina Avery travelled to Thailand and saw that the tuk-tuk (rickshaw) drivers drank a substance to keep them energized throughout the day. After some alterations to the recipe, and a flavour modification for the public, Red Bull was born.
Now over 2 billion cans are sold each year in over 120 countries and both Coke and Pepsi have developed me-to products
What Red Bull have succeeded in doing in a remarkably short period of time is to take on and beat - certainly in terms of contribution - two of the biggest brands in the world. That is something that most of us would think impossible or at least we would have only been possible by undercutting on price. In fact the reverse is true, Red Bull is considerably more expensive that Coke or Pepsi.
Have a look at this comparison of the price per gallon of various liquids in the USA:
Milk $3.79
Evian water $6.40
Coke $8.20
Budweiser beer $8.88
Red Bull $30.69
If we assume that the production cost of Red Bull and Coke to be similar we then get an indication of the simply stunning profitability of Red Bull.
Whats stopping you from doing the same?
You may not yet have heard of King of Shaves but, believe me, you will!
By far the dominant player in shaving products is Gillette followed by Wilkinson Sword and this again is a market where most of us would say you must be mad to attempt to take on either of these world leaders head-on - but that's exactly what Will King did in the UK in late 1992.
- and now one King of Shaves product is sold every 7 seconds from 30,000 stores world-wide!
In 1992 Will King created the shaving oil product that was to become the bedrock of the company. Alongside his girlfriend Ann, he initially worked from their back bedroom, selling King of Shaves Original shaving oil which he created after getting razor burn from shaving with conventional foams or gels. He hand-filled the first 10,000 bottles over the kitchen sink and in 1993, got the product listed by Harrods and Boots the Chemist.
King of Shaves specialises in shaving and skincare software platforms for men and women, offering a number of shaving and skincare solutions ranging from the original natural essential oils to the low foam aloe based AlphaGels, the Kinexium silicon technology advanced shaving range, the silicon enhanced Proshave range, the new ASC2 antibacterial and DSC products and the recently enhanced and redesigned King of Shaves Woman range with multi-benefit shaving gels, the original and cult Express Shaving' and VanishHair 'Shave Minimising' spritzes plus a fabulous leg toning moisturiser. Autumn will also see the debut of our first 'Skinvestment Series' range of 'skincare in shaving' products, designed for use with today's high performance, multi-bladed shave systems.
King of Shaves is now the #2 'shaving software' brand (by sales & volume) in the UK, and is widely acknowledged as one of the most successful brands in the fast moving men's grooming market place. It continues to grow in the USA too, with the brand now listed in over 20,000 stores across the USA and won the FHM USA's 2005 Annual Grooming Awards for 'Best Wet Shaving Product'. King of Shaves is also available in Australia, Zealand, and Holland.
Im sure youll agree a remarkable, and unfinished, success story.
Whats stopping you from doing the same?
Finally Virgin. If you haven't read Richard Branson's autobiography "Losing my Virginity I commend it to you.
Love him or hate him what he and his remarkable team have managed to do is to create a brand that is inherently trusted by a vast range of people - having started with the music industry he's then gone into airlines, mobile phones, financial products, cosmetics, trains and many other markets. What other consumer brand would you trust so highly that you would give them your money to invest if they decided to go into financial services?
When Virgin first moved into the airline business in the UK by far the dominant player was British Airways and it is now the stuff of legend that the then Chairman of British Airways, Lord King, dismissed Virgin as a serious competitor simply because Richard Branson wore a jumper to work, not a suit! - A classic case I think of sitting in the Room of Contentment in the Change House model in my book!
Indeed applying the Change House model to Virgin you have to agree that they have been very successful at constantly staying in the Room of Renewal and from there challenging and beating dominant, entrenched players in one market after another - it truly is very impressive.
So what's this got to do with you?
Your markets are different arent they? - Well I don't believe they are - the simple message I would give you is one that you've heard from me before:
You must be very good at what you do or, these days, you simply would not be in business.
If you are very good at what you do then get you shoulders back, believe in yourselves, work very hard on a compelling "new sandbox" strategy,
- and go for it!
© 2006 Roger Harrop
Fan Football Liverpool Site
