Do Not Waste Your Time Trying to Beat Your Competitors

1. Read the text.

We have looked at a number of factors that are often thought to be related to a company’s potential to achieve high growth. We asked, for example, is high growth a function of young managers? Of being a small entrepreneurial upstart? Of big financial investments in the latest technologies? Of operating in a favourable competitive or industry environment? No systematic differences were spotted along any of these lines. But what we did find was a fundamental difference in the way companies approached strategy.

When, for example, Callaway Golf, the US golf club manufacturer, launched its “Big Bertha” golf club, it rapidly rose to dominate the market. This was not because Callaway had no competitors – in fact, it had long-standing ones. But the golf clubs of all main manufacturers looked alike and were out of line with what players wanted: a golf club with a larger head that made playing more rewarding and fun. Callaway broke away from the pack with Big Bertha and earned high growth in revenues and profits. The competition, by contrast, so focused on one another, failed both to perceive and act on this opportunity.

High growth companies in our study paid little attention to matching or beating the competition. Instead, they sought to make the competition irrelevant by offering buyers a quantum leap in value. The question they posed was not what would it take to be better than the competition but what would it take to win the mass of buyers even without marketing? The drive for this type of innovation pushes these companies to question everything an industry and competitors are doing, opening their eyes to differences between what companies are competing on and what buyers actually value. This is not only the route to high creativity, but to tremendous cost savings. Just think of home products retailer Ikea; Direct Life Insurance; Home Depot; the US Do-it-yourself and home improvement retailer; news organisations CNN and Bloomberg, or Starbucks, the US coffee shops chain. The innovative ideas fuelling these companies’ highly profitable growth are not the result of aiming to build advantages over the competition. They are the result of a drive to offer superior value to buyers.

By W. Chan Kim and Renee Mauborgne

from the Financial Times

2. Train your reflective mind! Answer the questions:

1. Several companies are mentioned in the article, like Ikea, Direct Life Insurance, Home Depot, CNN, Bloomberg, Starbucks. What is so special about their businesses?

2. Do you agree that the only driving force for improving the quality of goods is making more money as a result?

3. Do you agree that competition is vitally important for business development?

4. Can you think of a product or service where there is something you would like to improve? For example, if you play a sport, are you completely satisfied with the equipment you use? What suggestions would you make to the manufacturer for improving the quality of the goods?

3. Scan the text and say whether these statements about high growth companies are true or false according to the study.

High growth companies:

1. pay a lot of attention to every move their competitors make.

2. offer something completely new.

3. do a lot of marketing.

4. don’t care about their buyers.

5. are more creative and have lower costs.

6. specifically aim to build advantages over the competition.

4. Look through the text and choose the right alternative.

1. Callaway’s new club succeeded...

a) slowly.

b) in an average length of time.

c) very quickly.

2. Callaway had...

a) no competitors.

b) the same competitors for a long time.

c) a lot of new competitors.

3. Callaway “broke away from the pack” means...

a) continued to have the same success as its competitors.

b) went bankrupt.

c) became much more successful than its competitors.

5. Callaway’s competitors...

a) knew what they should do.

b) reacted immediately.

c) did not react.

6. Golf players wanted a club with a head that was:

a) bigger.

b) cheaper.

c) lighter.

5. How to write these words – separately, hyphenated or together?

1. g o l f c l u b

2. h i g h g r o w t h

3. l o n g s t a n d i n g

4. d o i t y o u r s e l f

5. c o f f e e s h o p c h a i n

6. a) Match the words to build new word combinations:

1. high	a. rapidly
2. superior	b. cost
3. industry	c. potential
4. highly	d. differences
5. type of	e. the market
6. a number	f. value
7. tremendous	g. in revenues
8. to look	h. creativity
9. fundamental	i. of factors
10. company’s	j. on one another
11. to rise	k. innovation
12. to dominate	l. upstart
13. to earn	m. environment
14. to focus	n. alike
15. entrepreneurial	o. profitable

b) Translate these word combinations.

c) Try a group activity! Snowball storytelling.

The whole group is involved (maximum 15 people). One by one, invent a sentence that becomes part of the story. In each sentence use one of the word combinations above. Once used word combinations can not be repeated. The last person tries to bring the story to a logical end.

7. Task for the smartest!

a) Match each group of words (from a-o) with the correct business function (from 1–15).

1. Human resources 2. Purchasing 3. Marketing 4. Training 5. Legal 6. Information technology 7. After-sales 8. The Board 9. Finance 10. Distribution 11. Sales 12. Production 13. Research and Development 14. Accounts 15. Communications

a) trial / scientist / test / laboratory b) supervisor / shift / assembly line / parts c) press release / PR event / company image / house magazine d) retail outlet / monthly figures / discounts / commission e) share price / cash flow / capital / dividend f) training / safety / recruitment / employee relations g) bookkeeping / credit note / invoice / VAT h) network / screen hard disk / memory i) prospect / questionnaire / mailshot / advertisement j) delivery / order / office supplies / bulk buying k) shareholder / executive director / chairman l) course design / student / timetable / needs analysis m) hot line / complaint / 24-hour service / telephone support n) lorry / warehouse / packaging / stock control o) patent / signatory / copyright / contract

b) Now check the answers and, using these key words, try to explain what these business department do.

KEY:

Ex. 5. 1. golf club; 2. high growth; 3. long-standing; 4. do-it-yourself; 5. coffee shop chain

Ex. 6. 1. h; 2. f; 3. m; 4. o; 5. k; 6. i; 7. b; 8. n; 9. d; 10. c; 11. a; 12. e; 13. g; 14. j; 15. l

Ex. 7. 1. f; 2. j; 3. i; 4. l; 5. o; 6. h; 7. m; 8. k; 9. e; 10. n; 11. d; 12. b; 13. a; 14. g; 15. c