How CEO’s Respond to Competitive Changes


Share on LinkedIn

CEOs are called upon to thrive during competitive market changes. Sometimes these changes take you by surprise. You might be king of the hill now, but that could literally change tomorrow. When it happens, how do you plan to respond to competitive changes?

Learn from history. Spot competitive threats. Adjust your strategy. For insights on how to respond to competitive changes, download SBI’s 2014 Research Report. This report will point you toward developing the right plan to overcome change.

What Social Networks Can Teach Us

A very public corporate battle has been waged in the social networking industry. Facebook is the current, reigning champion of news feeds, puppy videos, and selfies. But that wasn’t always the case. For a sobering reminder of competitive market change, history provides a valuable lesson.

In 2002 an innovative social network was launched. It experienced a meteoric rise driven by youth, eager to connect and share. The network, Friendster, enjoyed undisputed dominance.

Popularity has its consequences. Friendster’s servers buckled under exponential growth. Its poor user experience drove subscribers to MySpace almost overnight. Then around 2008, plagued by catastrophic PR disasters, the MySpace users migrated to Facebook.

Obviously this is the short version of a robust series of events. But here are four (of the many) lessons to learn from this competitive environment:

  • Your strategy must maximize your future, not glorify your past. Many CEOs focus on what has worked in the past. While it is good to stay focused, this can breed innovative complacency. Leaders must drive the market to new frontiers, not recline in their past glory.
  • Don’t discount the little guys. There is a tendency to ignore the up-start disruptors. This is a dangerously overconfident way to approach your market. New technologies and behaviors open up new ways of doing business. The smaller, more nimble start-ups will exploit your hubris.
  • Build something that actually works. Friendster did not plan for rapid growth. Their servers collapsed under the weight of accelerated use. Once the user experience took a sharp decline, users fled to MySpace. If the benefits do not outweigh the costs, your customers will leave.
  • Embrace Misuse. Early on, Facebook users began setting up pages for their pets and clubs. MySpace and Friendster classified this as “misuse” under their terms and conditions. These “invalid” profiles were promptly removed. Facebook instead saw this as an opportunity. They allowed profiles for Fluffy the Poodle and the local Chess Club. Now these are key features of the network.

Where is Your Competition?

At a high level, your competition can be classified into several main categories:

  • Do nothing. The Buyers of your solutions can choose to do nothing to solve their problems. They may think ignoring a problem will make it all go away. Either way, you can lose the deal to this reason.
  • Do it myself. Your Buyers may choose to build a solution themselves with their own experts.
  • Major player. The large, established competitor is always a viable threat. They can pour unlimited resources into new innovations and marketing them.
  • Niche player. These are the specialized experts. They concentrate on innovative ways to disrupt the market. The good ones grow up one day.

Where are the Social Networks Now?

For now the dust has settled on the social network market. Here is what each is doing now.

  • Friendster. The site has redefined itself. It is now an Asian-centric gaming network with 100M users.
  • MySpace. The site has never recovered from its 2008, 80M user peak. Now its 1M users are part of a laser-focused, digital music interest group.
  • Facebook. Daily active users averaged 864M in September 2014, an increase of 19% year-over-year. Third quarter 2014 revenue was $3.2B.

How to Respond

No one can afford to lose market share. So as your market changes, you need a strategic response to stay ahead.

Learn from history. Spot competitive threats. Adjust your strategy. For more best practices to overcome change, download SBI’s 2014 Research Report. This report will provide the insight you need to respond to competitive changes.

Republished with author's permission from original post.

Dan Bernoske
Dan Bernoske serves as a Senior Consultant at Sales Benchmark Index (SBI), a sales and marketing consultancy focused exclusively on helping B2B companies exceed their revenue targets. With 13 years of experience, Dan has delivered results in business development, corporate strategy, product management, marketing, and process improvement.


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here