Compete Smarter, Not Harder: Five Points of Effective Tactics
The four P's of marketing — product, price, place and promotion — have little relevance in today's fast-changing business culture. In his new book, Compete Smarter, Not Harder: A Process for Developing the Right Priorities Through Strategic Thinking, MBA@UNC Marketing Professor Dr. William Putsis of UNC Kenan-Flagler explores a newer, more applicable model called the five points of effective tactics. Here's a look at these five tactics and how they help businesses stay competitive.
- Points of Positioning: Rather than relying on attributes (which can be imitated and are often fleeting), companies should focus on positioning. A strategic control point is often a key ingredient in positioning decisions. For instance, Google positions Google Glass not just as a cool, newfangled wearable computer, but one that could work seamlessly wherever the wearer goes with the use of other Google initiatives like Google Fiber and Project Loon. Building an infrastructure for lightning-fast Internet serves as a natural extension of Google Glass and helps ensure that would-be competitors have a harder time harnessing the same technology.
- Points in Time: Timing can impact the success of a product or business, but the first product to market isn't always the most successful. First movers who release products with attributes or features that can be easily imitated are often working at a disadvantage because competitors can soon follow with better or lower-cost offerings. But pioneers who move first and secure critical strategic control points — like Softsoap® buying up all the plastic pumps in the world — can trump rivals. "Those that move early and gain control of strategic control points have sustainable competitive advantages in the long run," Putsis writes.
- Points of Value: Putsis writes about how Heinz UK considered a suggested price cut. Heinz hired a major consulting firm to analyze data on purchasing behavior in the canned soup category. The firm suggested that a 10 percent price cut would produce a 38 percent increase in volume. But Heinz also considered that close competitors would also slash their prices, wiping out the potential gains. Successful strategies consider the net impact, not just the initial market response.
- Points of Access: Using creative barriers to entry and controlling points of access can be a powerful strategy. Gaining control over the value chain by releasing digital content that works on their platforms has helped brands like Amazon and Apple thrive. For instance, Amazon has the Kindle e-reader and makes digital videos available online through Amazon Instant Video. Apple revolutionized the way we listen to and buy music by creating the iTunes store and the iPod (note that Apple wasn't the first company to release an MP3 player, but iTunes had a profound impact on music).
- Points of Touch: In the era of big data, companies that are effective in reaching customers through multiple "points of touch" will ultimately thrive. If the product isn't in the outlet the consumer is using, such as Internet search, blog or Twitter, consumers won't consider that product because they have too much other information at their fingertips.
Businesses that ignore shifts in their industry do so at their own peril. Putsis stresses the importance of thinking young and thinking ahead. "I am always amazed how often companies 'wait and see' what the competitors do first," he writes. "Stop. Instead, try to influence outcomes by changing the incentive structure of your rival by putting a stake in the ground first." William Putsis focuses on the empirical application of game theoretic models of competition, competitive strategy, the marketing of private-label products, new product diffusion and product line strategy, international marketing, advertising and communications research, and sports marketing. His numerous scholarly articles have been published in top journals, and he serves on the editorial board of Marketing Science, Journal of Marketing, International Journal of Research in Marketing, Review of Marketing Science and International Journal of Marketing Education. He served as a regular contributor and contributing editor to the Eastern European business journal, Business Tech International. He has taught in executive non-degree programs for The Boeing Company, Barclays Bank, Royal Bank of Scotland, ABN AMRO, Amcor, British Airways, Baker Hughes International, the U.S. Navy, Matsushita, KONE and ExxonMobil.