Are You Limiting Your Business’s Potential?
Is your business ready to compete where it truly matters?
Rita McGrath, a leading voice in business strategy, once said that the biggest mistake companies make is defining themselves too narrowly within traditional industry boundaries. In her work on customer jobs to be done and transient advantage, she emphasises how companies compete in arenas (where customer needs, rather than rigid industry structures, drive the real battle).
Many businesses still define competition by industry labels. Banks compete with banks, retailers with retailers, without realising that consumers think differently. This industry-based thinking has shaped competitive strategies, market positioning and even customer engagement.
However, this strategy is outdated in the modern world. Customers no longer make decisions based on industry categories, they choose solutions that best meet their needs, regardless of where these solutions come from. As a result, companies are being disrupted, not just by traditional competitors within their industries, but by players from entirely different sectors offering innovative alternatives.
Take banking for example. It was once assumed that a bank’s competition was simply other banks. But today, mobile payment platforms and even retailers with financial service wings are challenging traditional banking models. Similarly, automotive manufacturers are no longer just competing with each other, they’re up against e-hailing services and even remote work trends that reduce the need for personal car ownership.
Streaming services that once primarily competed within the entertainment industry, are now contending with social media platforms for audience attention. With audiences increasingly engaging with short-form content like TikTok videos and Instagram Reels, traditional longform viewing habits are shifting, forcing streaming platforms to rethink how they capture and retain viewer engagement.
In order to stay ahead of the competition, businesses need to shift their focus from industry boundaries to arenas, which are larger competitive spaces influenced by changing customer needs and behaviours.
Why This Matters for Your Business
By shifting from an industry mindset to an arena mindset, companies can:
- Identify competitors they may not have considered before.
- Unlock new opportunities for innovation and partnerships.
- Protect their business against disruption.
- Gain a more holistic view of their customer’s decision-making process.
According to Rita McGrath (2021) when consumers buy goods or services, they are “hiring” them to address certain issues or meet specific needs in their lives.
Companies that don’t recognise this, run the risk of being blindsided by non-traditional competitors that solve the same problem in a more convenient, cost-effective or innovative way.
Since staying ahead of the competition depends on knowing what your customers really want, we at Bateleur Brand Planning are experts in identifying and defining needs. Whether you’re looking to expand into new spaces or gain a better understanding of your customers, we provide insights that turn challenges into opportunities.
by Talya da Gama
Production Director
Sources
McGrath, R. G. (2021, April 5). Think you know who your competition is? Think again! Retrieved from https://www.ritamcgrath.com/sparks/2021/04/think-youknow-who-your-competition-is-think-again/