Some Ideas for Differentiation in Your Industry Type
Some people will tell you that differentiation is only for rapidly growing sectors. That’s not true. The fact is, you can bring a new product to market profitably in any of the five following industry types:
Stagnant or declining industries
Leader - dominated industries
And here are some strategy ideas for each industry type
Emerging Industries – they spring up quickly, attracting attention and investment in the early phases.
Create a bold, win-early strategy – quickly make your product the standard that consumers want.
Super-serve niche markets – create something for a market that is too small to interest bigger companies.
Maturing Industries – demand has slowed; there is excess supply and international competition.
Create something for major customers – you can service large customers more efficiently than smaller customers. It’s also easier to maintain price competitiveness with large customers.
Expand to new markets – Look for less saturated markets with customers who are not using products or services in your category. Create something just for them – an example is the $100 laptop created for Third-World countries.
Stagnant and Declining Industries – there is either no growth or the industry is shrinking.
Focus on a niche with growth-potential. You’ve heard this before: The definition of insanity is doing the same thing over and over and expecting a different result. But it’s not always true. You can often do the same thing you are unsuccessfully doing in your market very successfully in another market. So find a market that doesn’t need your product and create something similar that it does need. For example, if you’re currently designing and manufacturing exercise shoes, design exercise shoes for pregnant women.
Innovate – the staler your industry is, the more you should focus on innovating, not just differentiating – go for the bold move.
Fragmented Industries – there are many businesses – none of which has a large market share.
Focus on a local market – create customized products and services.
Franchise – create a simple, standardized, no-frills business model that can you can easily replicate.
Industries with Dominant Leaders – one or two behemoths have a lock on the market.
Focus on long-term differentiators – leaders, forced to focus on quarterly profits to appease shareholders, have less ability to look for long-term trends and invest in long-term projects. Seek out and capitalize on anything both forward looking and long term.
Take advantage of your superior market knowledge – since smaller companies are closer to the ground, they often see the market better than larger companies – consider products and services geared to an under-served market.
Look at the negatives of your industry type and think about the opportunities they create. For example, a declining growth industry is inherently a volatile industry. With a sharp eye, you’ll see gaps opening up as businesses either exit the industry or streamline their offerings.