In the constant battle to keep up with the competition, managers often react immediately to other’s tactics by rolling out similar tactics of their own. Instead of thinking strategically about their next moves, they abandon the plan and step up to the wheel to play another round of tactical roulette. Their aim is to reduce the perceived gap between what the competition is doing and what they are doing. Little do they realize that the gap is the thing.
Customers should perceive a gap between your offerings and that of the competition. If they don’t, then their decision will simply come down to price. In the personal computer industry, Dell initially eliminated the retail store as a sales channel, which helped propel their early success as a direct-to-consumer PC producer. So other PC manufacturers might well have thought that because of Dell’s early success with this tactic, they should follow suit and eliminate the retail store from their business model because “it worked for Dell.”
When Apple rolled out their first retail store in May 2001, they were widely criticized for what many perceived to be a huge mistake. Fast forward 11 years and Apple’s retail stores are now credited for helping drive the tremendous popularity and revenue growth of their products. The aesthetics, efficiencies and customer service of these retail outlets continues to build competitive advantage for the company.
So the next time your competitor comes out with a new tactic, stop, drop and think.