Concessions & Market Share
A quick take on the idea that competing for market share requires making concessions.
The reality is that competing in business is hard. And for every textbook or how-to article that explains laddering and de-positioning your competitors to gain a strategic advantage is a tale of an ambitious company that failed as a function of an extremely difficult competitive landscape.
My friend and mentor served me an incredible business lesson in nine words last week.
“You have to make concessions to gain market share.”
Between inflation and competition, the pricing environment that one of our brands competes in has changed drastically over the past 24 months. In response, we’ve spent the past month formulating a comprehensive strategy to optimize our brand’s pricing and product offering - aiming to deliver more value at the same (or lesser) price point as our competitors in the space.
How will we accomplish this? By offering a menu of services that cannot be matched. And while this means that our margins won’t be as attractive as we want them to be initially - the long-term strategy is to deliver so much value to our customer base that our competitors are forced to bring down their irrational margins in order to compete with us where we are. They won’t be able to, though, because of our investments in human capital and service capabilities.
So an initial tactical concession such that we can compete for greater market share will end up being a strategic moat in the long run.
I look forward to seeing this play out.