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Nov 30, 2006

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Do not fear competition

The Fox and the Lion, Aesop's fables

There are various reasons why humans adore competition. One,
they like the glory of being a winner and it is only through
competition that winners can emerge. Two, competition
motivates people by demanding a high standard of performance.
Three, by preparing for the competition, they improve their
skills. Four, competition draws out the best and valuable lessons
can be learned from observing our opponents and counter
parties. In our competitive environment, we compete for
everything, from our parent's attention to a lucrative job in
office. Those who claim that they are not interested in
competing are either deceiving themselves or are fearful of
losing. Nonetheless, competition need not always end up in a
win-lose situation and if it is carefully managed, all the parties
can be winners.

Story:

The Fox and the Lion

The Fox and the Lion
The Lion and the Fox

(Illus by Arthur Rackham)

When first the Fox saw the Lion he was terribly frightened, and
ran away and hid himself in the wood. Next time he came near
the King of Beasts, however, he stopped at a safe distance, and
watched him pass by. The third time they came near one
another, the Fox went straight up to the Lion, and passed the
time of day with him, asking him how his family were, and
when he should have the pleasure of seeing him again. Then
turning his tail, he parted from the Lion without much ceremony.

Moral:

Familiarity breeds contempt.
Acquaintance softens prejudices.

Kidding me:

To retain their power status, bosses are wise to remain in their
high chair and contact staff only through email or SMS.

Quotable Quotes:

“The only thing we have to fear is fear itself.”
... Franklin D. Roosevelt

“I feel sorry for those who live without competition
... fat, dumb, and unhappy in cradle-to-grave security.”
... Donald M. Kendall

“This is not an age of castles, moats, and armor
where people can sustain a competitive advantage
for very long.” ... Richard D' Aveni

“Never wrestle with a pig. You get dirty and only the
pig enjoys himself.” ... Mark McCormack

“To win against opponents, companies need strategies
for three related tasks: outwitting, outmaneuvering,
and outperforming competitors.” ... Liam Fahey

“There are two ways to compete – in stable conditions,
you plan and you compete on scale. In unstable times,
you live by your wits.” ... Dick Cavanagh

[browse collection of quotes and quotations]

Lessons in life:

There are big players in almost any playing field. For any
business startup, the daunting task is to overcome the fear of
competition, or the dominance of major establishments in the
industry. There is a Chinese saying in Sun Tzu, The Art of War:
“Know yourself and know your enemy, and in a hundred battles
you will be victorious.” It is important to know your own
strengths and weaknesses. Likewise, you should find out every
information about your enemy, and be able to read or predict
their moves and strategies. Only then can you devise ways to
counter any attack by your enemies.

In the business circle, big companies seldom go into a head-on
collision with each other. Reason is pretty obvious – both
would suffer major “injuries”, and the only winners are the
small players (vultures) waiting to pounce on them. It is
therefore common for competitors to form joint venture
companies to bid for big scale projects. If they had bid for the
projects separately, they would have to set aside larger budgets
in order to outdo each other in the bids. By teaming up, they
would have secured the projects with lesser capital expense.
This results in a win-win situation for both competitors.

Sometimes, pooling together resources may clinch deals which
companies, on their own, could not. For instance, a construction
company may be good at laying foundation works and building
a house. However, to complete a housing project, it would
necessarily need the expertise of architects, surveyors, engineers,
and so on. Rather than engaging these people, the company should
collaborate with these other parties, and form an alliance or a
team to undertake the project. The profits will be shared, but the
beauty of it all is that with careful selection, you can round up a
formidable team that can give your clients the assurance and
confidence of a job well done.

Rather than bowing to the pressure of competition, smaller
players are always looking for tie ups with big players by
providing complementary services, or working in partnership
on certain projects. Another approach that most small businesses
take is to deal in niche markets. Again, in the example of property
developers, a small player may build high-quality houses to serve
an elite community, or build low-end no-frills housing to serve the
less well-off. In this way, not only will the small setups make
inroads into the industry, they are also able to co-exist with the
big players and get a share of the market. Work with competition,
not fear it.

Related Articles:

Focus on your proven strategy

Innovative marketing and packaging


Books worth reading:

Kim and Mauborgne, both professors at France's INSEAD, wrote
this book Blue Ocean Strategy: How to Create Uncontested
Market Space and Make Competition Irrelevant and explained
how big companies do not venture into new territories, but simply
focus on ways to take a bigger market share from the competition.
You will read the Southwest Airlines, the Cirque du Soleil, and
Starbucks stories and the strategies companies employ to enter
untapped market which they call the “blue oceans”.

For individuals, you may want to read Marcus Buckingham and
Donald O. Clifton's Now, Discover Your Strengths. According to
them, the most effective method for motivating people is to build
on their strengths rather than correcting their weaknesses.

© Business Fables and Management Lessons

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