Wake up call: How to Beat Entrenched, Dominant Competition

This post has little to do with Kendo UI, but after reading another story about Microsoft’s inability to unseat Google’s search dominance, it has me thinking about a very core question that many companies face: how do you beat an entrenched, dominant competitor?

This is a very specific kind of competition. Entrenched, dominant competitors do not exist in every market, but where they do, they seem near invincible. Apple’s iPod. iPhone. iPad. Google Search. Microsoft Windows. Disney Parks and Resorts. Coca-Cola. In each of these cases, the leaders in these markets are constantly being challenged by people trying to do what they do better.

But that is exactly the mistake.

Taking-on entrenched, dominant competitors requires a different kind of thinking. You cannot simply try to “build a better widget.” When a well established, dominant competitor exists, making a similar product that is technically better will not suffice. Even better and cheaper and newer won’t move the needle. Cases in point:

• Apple’s OS X has failed for years to make a meaningful dent on Windows despite it being a more modern, more secure, and (in some ways at least) easier to use OS.
• Pepsi continues to try to reinvent itself to remain competitive with archrival Coca-Cola despite the fact both companies are just selling slightly different sugar waters.
• More recently, Microsoft continues to throw good money after bad trying to build a “better search experience,” which you could argue they’ve done. But users still search with Google.
• Google is continuing to pound the Google Plus drum in a long-shot effort to beat Facebook at its own game of cultivating social networks, now even leading some satisfaction surveys. But where are 9 out of 10 of your “friends”?

No, to beat a dominant, entrenched competitor, you have to change the game. You have to throw-out the rule book and create a new category that makes your competitor’s products obsolete. You have to define the market. At least, that’s what recent history has shown us.

Again, evidence from our highly-visible tech giants:

• Apple finally leap-frogged Microsoft when they stopped pounding on the front-door with PCs and desktop operating systems and instead focused on building a modern “light-weight OS” for the future. Now analysts are predicting that Apple iOS/OSX will match the Windows install base by 2014.
• Despite the billions of dollars Microsoft has spent trying to challenge Google in search, it’s Apple’s Siri and Facebook that have done more to spook Google. Siri and Facebook are redefining how people access and perform search. It’s taking people away from the search page and moving the competitive battle to a new playing field where Google is not the entrenched leader.
• BestBuy stores had become the tour de force in consumer electronics, out lasting CompUSA, Circuit City, and even the WalMart and Target attack, but it was competition from online retailers- mostly Amazon- that have shaken it to the core. Competition didn’t try to build a better electronics store; they replaced it.
• You could even argue that Instagram was on its way to building amassing a community that could have posed a serious threat to Facebook before they were acquired. Did they earn their stripes by trying to build a better Facebook? Nope. They built a more focused, different social experience.

Of course, I know it’s easy to talk in platitudes, and you could easily cite hundreds of reasons why each of these competitor's rose and fell beyond these arguments. But the general observation remains: taking-on entrenched, dominant competition by stepping on to their playing field and playing their game almost always ends with the dominant player still sitting comfortably on top.

So what then can we learn from the lessons we see in the world around us?

If we want to win in markets where there is an entrenched, dominant player, change the game. Don’t build a better widget. Move the playing field and re-invent the game. Redefine the market. Will you always be successful? Of course not. But if you are, you have a legitimate shot at becoming the next dominant player. If you’re not successful, then you are not much worse-off than if you’d gone head-to-head in existing markets.

Talking about taking risk to invent new products, Jeff Bezos said, “You just have to place a bet. If you place enough of those bets, and if you place them early enough, none of them are ever betting the company. By the time you are betting the company, it means you haven’t invented for too long.”

Microsoft still doesn’t seem to get that for Bing, Windows Surface, or Windows Phone. Courier was a flash of brilliance that would have changed the game, but that was lost in the sea of corporate politics.

Google is actually starting to get this concept with Google Plus. Coming-out of Google I/O, I sense that Google is trying to extract the social experience out of a “social website” and make it an integrated part of email, calendars, and phones. I think Google will be more successful with Plus if they keep making moves like that.

Do you have an entrenched, dominant competitor in your market? If you’re tired of constantly playing catch-up and living in the shadow, then start thinking today about how you can redefine the game.