Design Thinking: How should we think about Competition?

Why am I writing this? My reasoning is based on the premise that most individuals, families, businesses, institutions, communities, don’t know how to think about competition.  Hopefully by the time you’re done reading this, you’ll take away one or two useful points.

I pulled this definition from the greatest online resource, Wikipedia.  “Competition arises whenever at least two parties strive for a common goal which cannot be shared”.  The Cambridge English dictionary defines competition as a situation “in which someone is trying to win something or be more successful than someone else”. 

Whether you agree with my adulation of Wikipedia, I suggest that it poses a better description on the nature of competition, than their more esteemed counterpart – Cambridge.

In this scenario, Wikipedia, in the light of competition goes home with the top prize: a pat on the head. (I’ll proceed to use my hand sanitiser).  With that said, there is a primary commonality between the two proposed definitions.  

Wikipedia: Strive | Cambridge: trying

Wikipedia: cannot be shared. | Cambridge: win, more successful than someone else 

I would define the axiomatic commonality of these definitions as the idea of “struggle”. A struggle for one thing which “cannot be shared”.  

Pushing forward, I will outline some key observations about the nature of ‘the struggle’. I’ll use the smartphone war between Apple(iOS) and Samsung (Android) for illustrative purposes.

  1. Apple CEO Tim Cook does not consider Samsung a direct competitor.
  2. All well and good, but anyone plugged into the tech space, knows, Apple are fully aware of what their competitors activities. How? Their mantra for at least the past 5 years has been, “don’t be the first, be the best”. So if Samsung come up with a feature such as force touch, for example, Apple will propose to analyse the usefulness of this feature. If yes, they will proceed to fix existing bugs and innovate further.
  3. But Samsung is not a competitor.
  4. Samsung make phones across all price categories.
  5. On a few occasions, Samsung have taken the guerrilla marketing approach to marketing, by directly antagonising Apple smartphones with regards to size, photo resolution quality, among other features.
  6. Apple is the most valuable company is world, valued at over a $1trn
  7. As of 2020 Q2, Android controls roughly 80% of the smartphone market, 20% of which is held by Samsung. Apple has approx. 14% of the market.

Initial deductions and takeaways

1. Apple and Samsung compete across multiple dimensions which inform customer perception and preferences.

2. Apple has a subtle/nuanced approach to competition.

3. Samsung without saying too much, sees Apple as a direct competitor.

4. Aside from pricing strategies which obviously play their role in Apple’s valuation, it’s correlation with its market share seems counter-intuitive on the surface.

Which raises the following questions

  1. What is Apple’s subtle approach?
  2. Is there an optimal approach to competition?
  3. We know what competition is. Who is the competition?
  4. If you compete across multiple categories, is there a primary category that supersedes the others?

Answers

1. Does Apple have a nuanced approach to competition? Absolutely. Apple observe their competitors, in this case, Samsung. But rather than obsessing over every move they make, they place a premium on defining a clear brand identity and what their goals are.  In other words, by understanding who they are, they put themselves and their customers first. 

2. In order to develop an optimal approach to competition, it is imperative to set a hierarchy to your priorities and have a firm value structure in place. 

On pure objectivity alone, the core priorities of each of these companies are clear. Apple want to create great products that feed their brand identity, one built on the legacy of their founder, the late Steve Jobs.  Prioritising this has inspired a cult like following among Apple enthusiasts, which has subsequently allowed them to overcome crisis moments (retardation of batteries, a slump in innovative ideas in recent years).  

Samsung, as stated earlier, sell products across all price categories.  From this, it can determined that they want financial and market size dominance.  Guerrilla marketing, also lends credence to this suggestion.  When Samsung’s phones began to explode a few years ago, the brand took a huge a massive hit.  Aside from the obvious danger it posed to customers, one can speculate as to what the consumer’s intrinsic reason was.

My suggestion is that there was a lack of care detected, which many probably suspected ran through the company as a whole.  Here’s a little analogy: if you know who the design chief of a company is, you are led to believe that they care about design. Jony Ive was the design chief of Apple for many years.  This was well known. Samsung on the other side, while creative, have not lent enough credence to their brand image in this regard.  

*I personally don’t know who the design lead is, and interestingly enough, the CEO (name also unknown) may or may not be in prison.

Customers may not be able to articulate these intrinsic thoughts, but it seems elementary that they are fundamental to their decision making when it comes to value purchasing.

3. We’ve all heard this before, “The only thing in your way is yourself”.  I’ll ascribe that saying to someone wise.  Variants on this saying exist:  “I am my only competition”, “I look in the mirror and see my greatest opponent”.  These platitudes ring true, to an extent.  It works to place the company and its customers at the apex, but it would be foolish to completely ignore the competing forces around. Philosophically speaking, Apple is a threat to itself, and probably its greatest threat. 

4. Price, Design quality, Photo resolution, App Store offerings,  Brand identity, Quality of marketing campaigns, e.t.c. Yes, Apple and Samsung are phone makers, for-profit organisations and giants of capitalism, but they compete cross multiple domains and sub-categories of user perception and preference.  Why is Apple so loved? Why is it so vilified by those who buy Samsung phones? Why is Samsung’s photo quality perceived as superior, market size greater, and a provider of fresh ideas that Apple proceed to adopt, yet are still seen as a follower in the category not a leader? Competition, is a struggle in the value hierarchy of the users.  

Apple have therefore used subtlety (that word again) and sophistication to rise to the top of the dominance hierarchy.  

Conclusion.

What is the problem with our understanding of competition?

The nature of competition is a struggle for dominance, which implies that in order for you to win, someone else has to lose. As the analysis above has shown, dominance can be quantitative (market value), so indisputable, but in contrast, brand value dominance is not absolute, but achieved through general consensus, which has an arbitrary element to it. The idea of absolutes in the case of competition, precipitates into what we know as a ‘dog eat dog’ view of the world at large. This is not a moralist or philosophical discussion, however this article does not lend itself to Machiavellian thinking.

It has served to provide a subtle psychological argument as to how to think about competition and operate effectively in such an environment, using design thinking as a solutions framework.

How should we think about competition?

  1. First, know who you are and what you want. (Goals, Priorities and Values). 
  2. If you can achieve the first, then you can proceed to understanding the competing environment. Obsession is counterproductive 
  3. You are usually competing across multiple domains, you will not dominate all of them. Further more, you don’t need to. Apple is the most valuable company in the world ( financial and branding cache) with a smaller market share than Samsung.
  4. Essentially, a complete dismissal of your competitor is dangerous. Been able to continually assess yourself and the competitive environment in adjacent is a dynamic, on-going activity (not easy).   

Overcoming your weaknesses and honing your strengths are paramount. Then the world awaits.  Act accordingly.

By: Tola MAKANJUOLA | 11/09/2020

Notes

Observation: Competition is complex. We don’t know how to think about it

Problem: The struggle inherent in competition creates the perception of winner takes all

Solution: Understanding needs to be nuanced. Approach needs to be on-going and dynamic. Take time to understand your goals, priorities, values.

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