Defending Your Brand: How Smart Companies Use Defensive Strategy to Deal with Competitive Attacks by Tim Calkins

Author:Tim Calkins [Calkins, Tim]
Language: eng
Format: mobi
Publisher: Palgrave Macmillan
Published: 2012-10-15T14:00:00+00:00

PREEMPT THE LAUNCH WITH YOUR OWN PRODUCT

If you hear that your competitor is thinking about launching a dynamic new product, one way to stop the launch is to simply introduce the idea first. This maneuver will almost certainly force your competitor to reconsider the entire launch.

New businesses thrive on buzz and excitement. Bringing something new to the market is thrilling, and this can generate news and create attention. For a new entrant, there’s nothing like this free media coverage, particularly when it highlights all the product features. Conversely, it’s difficult to generate excitement around a “me-too” new product. Bloggers have little incentive to talk about the second, third, or fifth new tech device. CNBC usually doesn’t spend a lot of time on things that aren’t innovative and different; who wants to hear about another strategy consulting firm? Financially, launching an innovative new product is very different from launching a product that is second or third to market. The innovative product will likely require less marketing spending and get a quicker start because it will generate lots of free press and trial from innovation seekers. The late mover must plan for much higher marketing spending and a slower buildup of sales volume, with a smaller market share.

For a defender, this presents a compelling opportunity. If you learn that a new competitor is considering launching a particular type of product, just launch the idea first. By occupying the first mover position, you become the innovator and can then change and perhaps destroy your competitor’s proposition.

More important, when you execute this strategy in defending, you don’t have to launch the perfect product. The goal is simply to fill the space in the market. So developing a product that is adequate is likely to be sufficient. The most important thing is speed.

The fastest approach is simply to publicly announce the intention to launch the idea. By claiming to be developing the idea, you immediately force your competitor to reconsider and reevaluate the entire enterprise.

If the attacker has strong patents and trademarks, then it might not be possible to launch the competitor’s idea. But creating and enforcing the protection of intellectual property is difficult. As Ohio State professor Oded Shenkar observed in a recent article, “patents provide only limited protection, since they’re costly—and in many cases impossible—to enforce. They can be ‘invented around’ or may require disclosure that actually makes imitation easier. The truth is most products, processes, practices, and ideas are not protected by patents.”9

Unilever recently employed this approach in Turkey. The company learned that a new competitor was preparing to launch a new dishwashing liquid, so Unilever quickly moved to launch the idea first. CEO Paul Polman explained the move: “In 25 days, we launched our dishwashing liquid, and we’re still waiting for our competitor to come.”10

Nike recently preempted a competitor in the sports apparel market. Under Armour is a fast-growing company; revenues have risen from $725 million in 2008 to almost $1.1 billion in 2011. The company got its start producing tight, form-fitting clothes that wick away sweat and water.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.