Wanted: Your Business

Warning!

The time the average North American spends strolling through their local neighbourhood shopping mall dropped from 4 hours to 3 hours a month in 2004. Instead, they are commuting to spend their time (and money) at suburban box stores.

Not concerned? You're not in retail? Think again!

Warning!

ING Bank is making a significant and successful run at the traditional community-based financial services industry and yet they don't have any branches. Instead, they have built an electronic "village" where people can come and go as they please.

Not worried? You're not in banking? Think again!

Warning!

Cirque du Soleil's revenues were in excess of $600 million last year and you probably can't name a single act, or exotic animal. Why? Because they don't have stars or animals.

Not nervous? You're not in the circus business? Think again!


Here's the truth … it's a jungle out there, and there is a new breed of predator – category killers.

Redefining the Playing Field

The fact of the matter is, every industry – from the legal profession, to the automobile manufacturers, to the cereal makers – is facing an inevitable and formidable threat. An energetic breed of radically minded competitor has grabbed hold of this new way of thinking and is redefining the very basis of competition.

Has your organization faced its own mortality?

Will you become one of this new breed?

Can you remain on the hunter rather than the hunted side of the equation?

In the past, organizations were "happy" to compete in a market. In other words, they expected to have competitors. The Category Killers work on a different premise; they don't want competitors, they want the Category and they want it all to themselves.

Their mission is to eradicate all others by changing the rules of the game.

M & A - is so passé

Don't confuse large brand name conglomerates with Category Killers.

GE didn't kill categories - they just beat competitors in their current industry.

Consolidation is not category killing. Category killing is when your organization develops a product/service or business structure that drives all customers to you, thereby killing off your competition. In the case of consolidation, if the end product/service is not overwhelmingly compelling, a new player with this elusive offering could swoop in and take the category all to themselves.

Move over - Kleenex and Hoover

Category domination is not about broad sweeping commercialization or in-your-face branding. Without question, if a consumer asks you for a Kleenex, or spends Monday night Hoovering their carpets, or if someone Google's you, then it is a huge victory for the Marketing department. However, in many cases, individuals are using another generic facial tissue, or vacuum cleaner. There is no competitor to Wal-Mart. They are the category.

Lead the Followers

One of the best attributes and advantages of being a Category Killer is the ability to control. Once your organization is successful enough to be considered among this elite group, dynamics change significantly. At this point, your organization must be in a position to lead.

You must be able to lead cities, municipalities, provinces and even countries into making it more enticing for you to enter into business there.

You must be able to lead your suppliers to make life 'easier' for you. You can 'suggest' they lower their selling price to you, implement new technologies, and make any modifications to their current distribution channels.

Lastly, your organization must be able to lead your customers. As there are no longer any competitors to turn to, you can create new products and services that will lock in your position in the Category.

Not Just Retail

In many cases, the belief is that Category Killers are only present in the retail industry. This couldn't be further from the truth. At one time, Google was "responsible" for 95% of all internet searches. ING Bank often surprises itself with its effectiveness at driving deposits. Oracle's mission to eradicate the competition is legendary. Every organization has the potential to own its category.

Serial Category Killers

Here's the kicker – good Category Killers evolve. They get smarter; they seek un-served markets within their markets, and modify their offerings to match up perfectly. Organizations such as Home Depot and Wal-Mart are now tailoring their offerings to urban centres, a stark contrast to the suburban model that spawned their very existence.

In Our Opinion
The Beacon Group's Steps to Becoming a Category Killer

Know Your Category – This first step seems obvious, however, in many cases, this is where far too many organizations go wrong. The purpose is not to be all things to all people; it is to dominate a slice of wallet for each customer in a given area.

Make Domination The Goal – Your current strategy (more than likely) deals with gaining market share, and winning a percentage of business from your competitors. To be a Category killer your strategy should involve eliminating competitors, and taking 100% of market share.

Be Relentless – The most important aspect of Category domination is the ability to remain stoic in the face of defeating a competitor. You cannot blink. You cannot feel remorse. You must move forward, to delight your customers.

Adapt – Once you dominate your Category, you must realize two things. First, as the 'big dog' on the block, everyone is going to attempt to dethrone you. Secondly, your customers' needs and demographics will be in flux constantly, and, therefore, your business operations, channels, and product/service mix will have to adapt to their ever changing needs.

Our Monthly Rant
Outmanoeuvring them

It would be nice if, as a defensive or delaying move, there was a way to beat back these Category Killers and give yourself some time to catch up. But wait a minute, these folks are good. Very good.

Let's look at Home Depot for example.

Perhaps you could beat them if you built a home improvement store tailored to women. Whoops - most of their urban stores are designed to appeal to women.

How about locating a store in Black urban communities?

Darn it - they recently opened a new store on Crenshaw Boulevard in South Central Los Angeles.

The point is – Category Killers are great organizations.

They think and then they outthink.

They move fast and then faster still.

They do things right and then they do them better.

The sad fact is that too many organizations are filled with employees that shop at, or with, Category Killers every weekend, but then do not translate the effectiveness, customer service, and reliability back to their jobs on Monday morning.

Contact us to learn more about how The Beacon Group can help your organization and its Leaders with our World-Class Strategic Planning, and Competency Development expertise.