Competition! This can be an entrepreneur’s nightmare. Surviving or out competing the competition; an interesting dilemma as entrepreneurs stumble on the realities of the playing field of business. Often thrown into the path of strategic survival, the critical question is how do you survive the red ocean of competition?
Ideas are the boon of entrepreneurship. They create the blue ocean of opportunity that opens up new markets with new offerings. Entrepreneurs are disruptors armed with innovation to offer value in a new form. Their ideas are disruptive as they offer products and services that dislodge the current market realities creating new market opportunities.
The innovative edge, this is gradually becoming the new focus of business strategies. As organisations rise and fall on relevance; relevance rooted in a continuous innovation drive entrepreneurs must look to take advantage of this drive and maximize the opportunities. They must learn to put disruption to the innovation edge to create new value that dislodges competition. They need to employ a disruptive innovation.
A disruptive innovation is an innovation that creates new market opportunities and a value chain that disrupts an existing competitive structure. The term was coined by Clayton Christensen’s in his book the “Innovator\’s dilemma”. Christensen lays the observation that large companies are more focused on value delivery that they lose sight of the innovative edge that could attract new customers. The mirage of value delivery often leads them to overcompensate on value in their offerings which renders these offerings too expensive and too complicated for many customers. Their products are innovative but not value-driven and as such don’t offer value to the customer.
Innovation is the vehicle of growth and relevance. It is creating, re-inventing and daring. As an entrepreneur you must employ innovation that improves your offering in ways that the market does not expect. You must strive to ensure that your offering opens up the market and is accessible to all customers. While large organisations focus on higher margins from high paying customers, look to the customer at the lower end of the market and invest in them. In the short run, these small target markets may offer low margins but they present an opportunity for entrepreneurs to truly understand the customer needs and develop offerings that meet this need.
Be the disruptive competitor. Build on the lower tiers of the market and tackle the competition from the least expected spot. As you scale, build on innovation and a value consciousness that is focused on meeting the need of the customer. In this way you will take charge of the lower end of the competitors market and upend the competitive structure. And while they trail back to retake that market you have built a competitive advantage to push for growth in the upper end of the market. This is innovative disruption at work.
For entrepreneurs, opportunities lie in employing innovative disruption in business. It helps them stay ahead of the competition, rather than competing, you use competition to fuel your growth and create value that is innovative and that meets the customers need.
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