What follows is a classic case of how to blow away your competitor. The first step is to choose your competitors well.
When Digicel entered the telecommunications market in Jamaica about 14 years ago it knew precisely what it was up against. Cable and Wireless. With over a century of monopolistic abandon and disregard for the Jamaican public, C&W (now LIME) failed to meet our rapidly growing demand for mobile telecommunications. At one point you had to pay C&W to make a cel phone call, and also had to pay to receive a call. How we longed for an end to the monopoly!
A juicy market for a sharp, nimble competitor. But what should be their marketing strategy?
I’ll never forget a discussion at UTECH one evening on what marketing strategy Digicel should adopt (hello Patrick Tucker, Dollis Campbell, Shirley Lazarus…). The thinking was that Digicel needed to ruthlessly apply the market challenger’s strategy prescribed in Wilson & Gilligan’s classic, “Strategic Marketing Management.”
Quoting Wilson & Gilligan, “It has long been recognised that market challengers only rarely succeed by relying on just one element of strategy. Instead, the challenging strategy needs to be made up of several strands that, together, provide the basis for competitive advantage.” They then go to list the eight most commonly used and successful strategic strands for market challengers as:
- Price discounting
- Product and/or service innovation
- Distribution innovation
- Heavy advertising
- Market development
- Clearer and more meaningful positioning
- Product proliferation
- Higher value added.
Equally important was the fact that C&W’s entrenched bureaucratic culture wouldn’t have a chance against an agile competitor driven by the achievement culture. Within two years Digicel overtook C&W, switched to the market leader’s strategy, and relegated them to being a distant follower in the Jamaican market.
Digicel began by choosing their competitors well, and, applying the appropriate corporate and marketing strategies, they rapidly became a dominant force in most of their markets. For some businesses it may be too late to ask how well did you chose your competitors. Maybe the more important question for most of us is, “How successfully will we compete in our chosen markets?”
Herman D. Alvaranga is a marketing strategist and principal of the Caribbean School of Sales Management.