flevyblog

Flevy Blog is an online business magazine covering Business Strategies, Business Theories, & Business Stories.
MANAGEMENT & LEADERSHIP STRATEGY, MARKETING, SALES OPERATIONS & SUPPLY CHAIN ORGANIZATION & CHANGE IT/MIS Other

Innovators or Sheep?

Editor's Note: Take a look at our featured best practice, Digital Transformation Strategy (145-slide PowerPoint presentation). Digital Transformation is being embraced by organizations across most industries, as the role of technology shifts from being a business enabler to a business driver. This has only been accelerated by the COVID-19 global pandemic. Thus, to remain competitive and outcompete in today's fast paced, [read more]

* * * *

Black_sheep-1Have you ever notice that so many companies want to be visionary? Able to predict future products and services you need; but yet they also say they respond to market demand by being market-driven. Seems to me that’s an oxymoron. Can you be both market-driving and market-driven?

To disruptively break free from reactive business strategy and accelerate the agile and pivot-able strategy, we need to understand the difference between market-driving and market-driven companies. In his 2004 book, “Marketing as Strategy,” Nurmalya Kumar characterised these two types of strategies.

  • Market-driving companies rule the future – they push the envelope of possibility and consistently surprise customers by introducing unique value in exceptional brand new products and services.
  • Market driven companies are doomed to fall increasingly further behind as they react to customer needs that will surely change by the time they deliver the ultimately out of date product.

The Market-driving and Market-driven Oxymoron

The oxymoron mentioned above is simply the observation that to be market-driven, you are letting the past, make your decisions. So then, how can you project a forward looking vision, envisioning a new and different future, if you are driving while looking backwards?

A Current Example

Consider Apple vs. Microsoft. Apple is a market-driving company anticipating trends and taking risk to consistently amaze and surprise customers with delivered value. Microsoft is a market-driven company missing trends and failing to take risk which forces it to react after dramatic market shifts have already occurred. Invariably, one can predict the fate of Zune vs. iTunes, or understand the relative adoption of Windows mobile vs. the iPhone. It’s not hard to see which approach is also more cost-effective.

Approach Makes Them Different

Market-driven companies perform exhaustive market research to fully understand an existing customer need. They perform multiple validation cycles with heavy documentation of requirements and written detailed specifications of features and benefits. A serially laborious process is then followed through multiple cycles of develop-and-test until a differentiated product or service is identified. For some, static well-defined market segments, perhaps this approach can still work. (Procter and Gamble for many products, is a good example of being driven by these static segments).

Market-driving companies focus on a vision for the future, unhampered by traditional thinking and industry norms for product development. Market-driving companies are poised to make discontinuous leaps in innovation in terms of customer value (not just incremental capability and technology). These companies also have a mission to build unique value networks and engage in a bigger business ecosystem through technology and business model innovation. Apple’s iPod with iTunes is a good example of a value network in a business ecosystem.

9 Ways to Differentiate

In pondering what it takes, or how one can observe and more deeply characterise one type of company from another, let’s look at these key differentiators.

Market-driving Market-driven
Disruptive Reactive
Innovative Incremental
Creative Insignificant
Value Features
Agile Rigid
Competitive Tentative
Decisive Unsure
Clear Confused
Dynamic Static

 

To get a better understanding of these criteria, let’s explore them in more detail in the comparisons that follow.

  1. Market-driving companies are disruptive to markets surprising customers with value. Market-driven companies are reactive to clear shifts that are late and underwhelming.
  2. Market-driving companies are discontinuously innovative introducing radical efficiency. Market-driven companies are incremental in adding features to automate existing methods.
  3. Market-driving companies bring creative solutions to difficult customer challenges. Market-driven companies bring insignificant responses leaving customer questions unanswered.
  4. Market-driving companies create massive value to delight customers. Market-driven companies add expected features that fall short of customer expectation set by competition.
  5. Market-driving companies are agile in their ability to pivot both vision and strategy. Market-driven companies are rigid, and unable to modify past decisions even for course-correcting good reason.
  6. Market-driving companies are recognized as competitive by early activity. Market-driven companies are perceived as tentative, by their late reactivity.
  7. Market-driving companies are decisive in quantifying and taking measured risk. Market-driven companies are unsure in researching and over-analyzing seemingly irrelevant risk.
  8. Market-driving companies are clear in articulating new business model value to customers in simple terms. Market-driven companies are confused in their positioning and value messages to the market.
  9. Market-driving companies are dynamic in regularly creating new and growing markets. Market-driven companies are static and can only serve existing often declining markets.

How To Become Market-driving

Like momentum keeps a freight train in motion, it’s generally easier to sustain a market-driving organisation than to transform into one. It’s not easy to become a market-driving company, if not one already. But if yours is a reactive market-driven company, expect to fall further and further behind, as the rest of the world is increasingly market-driving. Your company’s competition is taking the risk required to create the future that your company will be chasing.

To become a market-driving organisation, you must first decide and commit to making the changes necessary. The transformation will require a shift in culture. Market-driving companies are led by marketing and the CMO’s leadership and backed up by forward-looking predictive data and prescriptive analytics. Being market-driving requires the right people, the right leadership, and the will to make the difficult changes. The vision for being a market-driving company must come from the top. The CEO must create and communicate a clear picture of what your company looks like as a market-driving company. It requires a pervasive strategy and continuous mentoring of management and staff throughout the organisation.

Which type is your company? Market-driving or market-driven?

32-slide PowerPoint presentation
The Business Case is an instrumental tool in both justifying a project (requiring a capital budgeting decision), as well as measuring the project's success. The Business Case model typically takes the form of an Excel spreadsheet and quantifies the financial components of the project, [read more]

Do You Want to Implement Business Best Practices?

You can download in-depth presentations on 100s of management topics from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.

For even more best practices available on Flevy, have a look at our top 100 lists:

These best practices are of the same as those leveraged by top-tier management consulting firms, like McKinsey, BCG, Bain, and Accenture. Improve the growth and efficiency of your organization by utilizing these best practice frameworks, templates, and tools. Most were developed by seasoned executives and consultants with over 20+ years of experience.

Readers of This Article Are Interested in These Resources


407-slide PowerPoint presentation
This is a very comprehensive document with over 400+ slides--covering 58 common management consulting frameworks and methodologies (listed below in alphabetical order). A detailed summary is provided for each business framework. The frameworks in this deck span across Corporate Strategy, [read more]


 
1150-slide PowerPoint presentation
 
 
103-slide PowerPoint presentation

About Grant Stanley

Grant Stanley is an experienced Sales & Marketing Leader with over 20+ years coaching, training, and developing New and Existing Business. With experience in IT, Telecom, Capital Equipment, and FMCG, Grant shares his business experiences and expertise on his blog, CSM Consultants (Inspiring & Enabling Change). Grant is also an author on Flevy, where he has published materials from Business Fundamentals to Management and Leadership Excellence. Take a look at all of Grant's Flevy best practice documents here. You can also connect with Grant Stanley on LinkedIn here.


Complimentary Business Training Guides


Many companies develop robust strategies, but struggle with operationalizing their strategies into implementable steps. This presentation from flevy introduces 12 powerful business frameworks spanning both Strategy Development and Strategy Execution. [Learn more]

  This 48-page whitepaper, authored by consultancy Envisioning, provides the frameworks, tools, and insights needed to manage serious Change—under the backdrop of the business lifecycle. These lifecycle stages are each marked by distinct attributes, challenges, and behaviors. [Learn more]

We've developed a very comprehensive collection of Strategy & Transformation PowerPoint templates for you to use in your own business presentations, spanning topics from Growth Strategy to Brand Development to Innovation to Customer Experience to Strategic Management. [Learn more]

  We have compiled a collection of 10 Lean Six Sigma templates (Excel) and Operational Excellence guides (PowerPoint) by a multitude of LSS experts. These tools cover topics including 8 Disciplines (8D), 5 Why's, 7 Wastes, Value Stream Mapping (VSM), and DMAIC. [Learn more]
Recent Articles by Corporate Function

  

  

  

  

  

The Flevy Business Blog (https://flevy.com/blog) is a leading source of information on business strategies, business theories, and business stories. Most of our articles are authored by management consultants and industry executives with over 20 years of experience.

Flevy (https://flevy.com) is the marketplace for business best practices, such as management frameworks, presentation templates, and financial models. Our best practice documents are of the same caliber as those produced by top-tier consulting firms (like McKinsey, Bain, Accenture, BCG, and Deloitte) and used by Fortune 100 organizations. Learn more about Flevy here.
  


OUR CORE OFFERINGS
Flevy Marketplace: Top 100
· Strategy & Transformation
· Digital Transformation
· Operational Excellence
· Organization & Change
· Financial Models
· Consulting Frameworks
· PowerPoint Templates
FlevyPro (Subscription Service)
KPI Library
Streams (Functional Bundles)
Flevy Executive Learning (FEL)
PowerPoint Services

FREE Resources

About Flevy
Management Topics
Marcus (AI-Powered Consultant)
Partner Program
LinkedIn Influencer Marketing
FAQ / Terms / Privacy / Blog
Contact Us: support@flevy.com



CONNECT WITH US!
       
TOP 100 TRENDING TOPICS
Acquisition Strategy
Agile
Analytics
Artificial Intelligence
Balanced Scorecard
Best Practices
Big Data
Breakout Strategy
Business Continuity Planning
Business Plan Financial Model
Business Transformation
CMMI
COBIT
Change Management
Cloud
Communications Strategy
Company Financial Model
Competitive Advantage
Competitive Analysis
Consulting Frameworks
Continuous Improvement
Core Competencies
Corporate Culture
Cost Reduction Assessment
Customer Experience

BROWSE BY FUNCTION
Strategy, Transformation, & Innovation
Digital Transformation
Operational Excellence and LSS
Organization, Change, & HR
Management Consulting

Customer Journey
Customer Service
Cyber Security
Data Privacy
Decision Making
Digital Marketing Strategy
Digital Transformation
Digital Transformation Strategy
Due Diligence
ESG
Employee Engagement
Employee Training
Enterprise Architecture
Growth Strategy
HR Strategy
Hiring
Hoshin Kanri
ISO 27001
ITIL
Information Technology
Innovation Management
Integrated Financial Model
Kaizen
Kanban
Key Performance Indicators

ADDITIONAL RESOURCES
Business Strategy Frameworks
Case Studies
Consulting Training Guides
COVID-19 Trend Data
Digital Transformation
Financial Advising Services (FAS)

Knowledge Management
Leadership
Lean
Lean Manufacturing
Logistics
M&A (Mergers & Acquisitions)
Manufacturing
Market Research
Marketing Plan Development
Maturity Model
McKinsey PowerPoint
McKinsey Templates
Operational Excellence
Organizational Change
Organizational Design
Performance Management
Post-merger Integration
Pricing Strategy
Process Improvement
Process Maps
Procurement Strategy
Product Launch Strategy
Product Strategy
Project Management
Quality Management


Free Resources
KPI Library
Lean Management
Lean Six Sigma Training Guides
Marcus Insights
Operational Excellence

Real Estate
Remote Work
Restructuring
Risk Management
Robotic Process Automation
SWOT
SaaS
Sales
Scrum
Service Design
Six Sigma Project
Social Media Strategy
Strategic Planning
Strategic Thinking
Strategy Development
Supply Chain Analysis
Sustainability
Target Operating Model
Team Management
Total Productive Maintenance
Value Chain Analysis
Value Creation
Value Stream Mapping
Visual Workplace
Workplace Safety


Product Strategy
Small Business Owner
Startup Resources
Strategic Planning
Strategic Planning Process
Value Innovation Strategy


© 2012-2024 Copyright. Flevy LLC. All Rights Reserved.