Playing the "Game" - Your Way

One of my favorite cartoons as a child was Alice in Wonderland. However, after learning more about Business Strategy, I am starting to appreciate how the cartoon symbolizes the market place. Specifically, the following scene:

You see, Alice is faced with the same problems many businesses face. Confused? Don't be. Here's what each aspect of the Croquet game represents:

• Queen of Hearts: In this case she's the government and sets all the rules which Alice has to abide by. Blustery, and powerful, it's do as I say, not as I do...much like our "elected" officials.
• Card Men: They represent the market place, and as a business person you have to anticipate changes, or you could lose the game.
• Flamingo: These "croquet mallets" are perfect examples of technology. It is always changing, and is hard to control. Just when you do begin to master it, the market has changed and you have to learn a new technology.
• Mole: These cute little guys represent your customers and employees. You need to use technology to somehow reach your customers and employees so you can be successful in the market. Failure to motivate your workers and reach your customers will result in your inability to keep pace with market changes.

The true catalyst here though is the Cheshire Cat. I think he(?) represents all that can go wrong if you don't work to secure a competitive advantage. There are 6 ways to avoid having him "pop" in to ruin your company:

1. Being the first mover/entrant into the market
2. Niche dominance
3. Cost Leadership
4. Product/Service Differentiation
5. Market Share
6. Government Protection

Each of these strategies have pros and cons, but the two I find most interesting are Niche dominance & Product/Service Differentiation.

Niche dominant companies go after specific portions of a market and strive to be the best in that area. While there are a few success stories for companies serving a niche, I think the best has to be Nintendo. In 2002 Nintendo was left for dead by many gamers, game developers, and market analysts as the PS2 was the dominant player in the Video Game industry.

However, Nintendo recognized that the casual gamer was largely being ignored by Sony, Microsoft & themselves in their quest for dominant market share of the hard core gamer. So the powers that be over at Nintendo decided to change their business strategy, and focused on developing a console that the casual gamer would enjoy...and enjoy we did.

My friends...Allow me to introduce The Nintendo Wii:

By changing how video games are played, Nintendo has found the "Power-Up" they needed to take back the crown as No. 1 video game company in the world.

Product/Service Differentiation strategies require a bit more finesse. If this is your strategy, you'll have to convince the market that what you're offering is unique and therefore worth the higher sale price. When searching for companies that employ this strategy, I think most people will look at companies like Starbucks, Whole Foods, or Neiman Marcus because of their push to separate themselves from the pack by offering higher quality products and service.

It is this market perception that allows them to charge higher prices and to do so succesfully. Each of these companies saw a market that was overcrowded (or untapped in the case of Starbucks), and jumped in with a business strategy that allowed them to create a brand that symbolizes a premium good or service.

A good strategy doesn't aways lead to huge sucess in the market. That's why you play the game. Ultimately though, no matter which of the six strategies you choose to employ, be sure that it is of your own choosing, and after careful thought to the pros and cons...a bad strategy will set you in the wrong direction every time.