In new and expanding markets, it’s often enough to just show up. You don’t need a strategy because market demand exceeds supply. Customers are more concerned about access and availability than anything else.
But in more competitive environments, like established markets, it’s difficult to grow by being a run-of-the-mill entrant. Now the shoe is on the other foot. Customers have lots of options and are much more selective. If your offer is similar to competitors in this market:
- You’ll likely have weak or inconsistent sales.
- There’s pressure to compete on price.
- Leaders become cemented in their position and difficult to un-seat.
- Small differences become important as customers look for reasons to buy from you rather than competitors (distance, personality, appearance).
The problem is that most markets are established and many of the new ones don’t last.
The solution is in what defines entrepreneurship. From Wikipedia:
In the early 19th century, the French economist Jean-Baptiste Say provided a broad definition of entrepreneurship, saying that it “shifts economic resources out of an area of lower and into an area of higher productivity and greater yield.https://en.wikipedia.org/wiki/Entrepreneurship
Established markets hit plateaus of productivity in creating value. The last innovation becomes the new normal. E.g. every razor blade now has multiple blades on it, but at one time Gillette’s Mach 3 was an innovation.
In established markets, to generate energy to grow, you have to innovate in value creation. You have to transmute resources to be more productive. Because value is subjective, you don’t have to create new value for the entire market, just enough to power your company to the next level. That most often means choosing a niche or segment in the market and figuring out a way to create more value for them.
Like I wrote about a couple of days ago, it’s not enough just to position to that niche or segment and say, “We serve you.” You have to create new value that is different in a way that matters when they compare it to the similar offers they see in the mainstream.
If you’re not riding the rocket trajectory of a new market, what are you doing differently to create value for your customers?