Adaptability as a Competitive Advantage for Startups July 30, 2019 RICCentre As an entrepreneur or startup, it often becomes difficult to maintain a competitive advantage in the rapidly changing tech industry. With the constant introduction of new products, the unpredictable shift of consumer preferences and tastes, and the instability of value chain players, building out a strategy around a traditional, sustainable advantage may prove to be unwise. The industry leaders no longer solely rely on position or scale to accelerate their success, but instead they’re learning to adapt to the twists and turns of the technology landscape. Businesses may need to rethink their competitive advantage. Turning to new strategies that focus on and harness the power of adaptability may provide companies with the fuel they need to gain an edge over competitors. But, what does adaptability as a competitive advantage look like built into a business plan? How can you adapt to the fast-paced changes in the industry? What can you do to situate yourself ahead of the competition? Conduct a New Competitor Analysis Identify and address the competitors within the market. Research and recognize who the big players are in your industry. What products or services do they provide? How does your solution differ from theirs? What makes your solution unique and what value do you provide? What barriers will hurt your chances of entering into the market? How are consumers reacting to the competition’s products? By analyzing the competition, you’ll begin to understand how to position and protect your company from potential threats and opposition. When considering significant players, you should look at both your traditional and untraditional competitors. Think about Traditional Competition. Your competitors can provide some good insight into how the industry may affect your business. Look at what influences their success and what causes their downfalls. Ask yourself how you can protect your company against those similar factors. Comparing yourself to other businesses in the same industry can shed light on what kind of strategies your company may need to take. Examine Competition in Other Sectors. Don’t limit yourself to addressing only your direct competitors, instead think broadly and analyze how new players are disrupting other sectors. In her article “Transient Advantage,” Rita Gunther McGrath, a professor at Columbia Business School, warns that failing to think about untraditional competitors may blindside your company in today’s tumultuous environment, where industry lines blur and sectors overlap. She provides the example of Walmart, a big retailer that has begun to edge into the healthcare industry, to illustrate her argument. For McGrath, adaptability prioritizes customer satisfaction by providing them with the solution they need to solve their problem, over simply making more money than your industry competitors. Monitor Uncertainties Startups that aim to become more adaptive must also consider the risks and uncertainties associated with the industry. It’s important to have a contingency for every risk and to ensure that appropriate metrics and systems are in place to monitor those risks. Companies that master adaptability are those that address each business uncertainty with a strategic initiative, says Martin Reeves in his article “Adaptability: The New Competitive Advantage.” “Depending on the nature of the uncertainty, the goal of the initiative may be responding to a neglected business trend, creating options for responding to it down the line, or simply learning more about it,” Reeves writes. To manage their initiatives, companies must implement metrics that simultaneously monitors risk and encourages new company growth. Create Problem-Focused Solutions Products may never get off the ground or may become completely obsolete if they fail to address a problem for an identified target market. Flexible designs offer a competitive advantage as they allow companies to adapt their solution to meet the consumers’ needs. Offer your market a solution to a problem that they can personally identify with. McGrath claims that companies who are skilled in adaptability “put themselves in their customers’ place and consider the outcome customers are trying to achieve.” Providing a well-designed, complete solution to an industry problem is a critical step in creating a competitive advantage for your business. Working towards a solution that addresses a market problem requires adaptability as consumers needs and preferences can shift over time. Adaptability challenges entrepreneurs to become comfortable with modifying their solution. Experiment with New Ideas Experimentation works hand-in-hand with adaptability. Companies that make room for experimentation open doors to new ideas, discoveries, and approaches. A willingness to learn from product trials allows your company to grow from both the triumphs, and the mistakes. Reeves writes that industry leaders who excel in adaptability often use virtual environments to “generate, test and replicate a larger number of innovative ideas faster, at lower cost, and with less risk than their rivals can.” He also highlights that companies may decide to experiment with business models and strategies alongside the traditional product and service experimentation. Staying ahead of the competition may require companies to build strategies that allow them to adapt to the rapid-pace changes in the tech industry. Creating an adaptable business model can help your company enter the market and create an innovative product that meets consumers’ needs. Let’s kickstart your enterprise. RIC Centre’s Startup Crash Course gives tech entrepreneurs efficient tools to build a strong business model and plan, practical customer interview techniques, and key metrics to help track the health of your business. Our next session falls September 11th, 2019. Register Today About the AuthorJessica CabralCommunications InternJessica Cabral is a recent graduate from the Professional Writing and Communication program at the University of Toronto Mississauga. In her four years at UTM, Jessica has worked on various campus publications and strengthened her passion for writing and editing.