How to do strategy without sacrifice

By now I think we all know the basics.

You want a good strategy?  Then you need to sacrifice.  You need to decide not only what you’re going to focus on, but also what you’re going to neglect.

Typically this means deciding what you’re going to allow your competitors to have.  Picking the areas you’re going to let them win.  Giving them X so you can have Y.  This works, as we know, because some directions are incompatible with others – so your sacrifice will open up opportunities others aren’t able to copy.

It’s all classic stuff right?  (At least I hope it is to readers here)

But even so, some brands just don’t want to do this.

Sacrifice, after all is hard.  And harder for some than others.  Indeed, as we shall see, some find it almost impossible.  So what are they to do?  Just accept there is no way for them to adopt an effective strategy?  Accept that they must continue mirroring their competitors and commodifying their market?

Not quite.  There is another option for such brands.  A way to strategise without sacrifice.  It breaks the rules, is harder to execute, and I certainly wouldn’t recommend it for everyone.  But for the brands who find the classical approach tricky, it could be a good option.

Before getting into it, let’s just acknowledge why it is that some brands struggle with sacrificing market position.

Generally this is much more common in B2B spaces than B2C.  The reason for this is simple.  Most B2B businesses respond to a brief from their clients with a product that is not fixed.  For example the services a law firm delivers will generally be bespoke to the client’s needs, and different with every project, whilst a shoe brand sells the same shoes to everyone.  B2C brands generally have fixed products like this.

Now fixed products lend themselves far more easily to strategy than un-fixed ones.  This is because brands with un-fixed products know that at a push they could do pretty much anything for their clients within their industry scope.  They can essentially come up with a new offering for every new client.  As a result any kind of strategic focus and sacrifice must necessarily rule out business they know they could do – leaving perfectly ripe fruit on the tree.

Fixed products don’t have this issue.  They know they can basically only do “one thing”, and so are far more open to sacrifice.  They see the upside.  Un-fixed products however, see only downside.

One obvious place you witness this is in the strategic positioning of advertising agencies.

If anyone knows the value of differentiation it’s them – however they are, for the most part, completely undifferentiated.  Why?  Because at the end of the day they can answer pretty much any brief, and are loathe to turn potential clients away.  You might argue that they “shouldn’t” think this way, and that they would be better off if they were to focus and sacrifice.  And maybe that’s true.  But it doesn’t change the fact that it’s very hard to take an action that is immediately going to sacrifice huge chunks of your business.

I have huge sympathy for such unfixed businesses, and that’s why I’ve developed a method of strategy which is easier for them to adopt, which I call “vertical strategy”.

To understand what vertical strategy is, you first need to visualise classic strategy as being “horizontal”.  This means that you have a number of potential positions for a business and its competitors arranged side by side in a market, ideally with no overlaps, like this:

Your job in that game is to find one that works for you, at the expense of the others.

In the case of vertical strategy however, instead of finding a different position beside your competitors, you seek to create a new one on top of them.  This means fundamentally offering the same basic service to the same part of the market as your competitors, but doing it in an “added value” way that changes the game.

The most basic example of a vertical strategy is what we might call “over delivery”.  Going above and beyond what people expect for services in that space.

For instance the new Ford Bronco occupies the same space (adventurous off roaders) as the Jeep Wrangler, the LandRover Defender, and perhaps the Mercedes G-Wagon.  However one key area where it differs is just how far they push things – for example allowing you to remove the doors of the vehicle, or having a plug hole in the passenger footwell to let water drain through, as if they anticipate the car getting filled with water.

This is an example of a vertical, rather than horizontal strategy.  Yes, it disobeys various basic strategic principles, such as never doubling-up on what your competitors are doing – but if executed powerfully and artfully enough it almost succeeds in creating a “new” market position out of an old one.

Any brand who struggles with differentiation, particularly due to an un-fixed product, would do well to consider a vertical strategy such as this.  Ask how can you “push up” in the market, rather than “move sideways”.

The sorts of questions you might consider are:

  • What would an extreme or bonkers execution look like in our space?
  • Are we and our competitors solving a surface level problem that would be better addressed at a deeper level?
  • Is there a category generic (i.e. something which everyone offers but doesn’t pay much attention to) which we could amplify / celebrate?

Answers to these questions will not uncover white space in your market.  You will still be doing fundamentally the same “job” as everyone else.

But they may give extra leverage in doing that job.  And in the absence of truly anti-competitive strategy, that’s the next best thing.

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