Devastate rivals profit sanctuaries
This term refers to the act of majoring more in the area of a competitor’s business that serves as the main source of revenue (Stalk and Lachenauer 6). Each business has a profit haven that accounts for the largest percentage of its revenue. If a business enters a certain market segment dominated by its competitor and introduces a product or service similar to the competitor’s that is cheaper and of higher quality, then the business is said to devastate the rival’s profit sanctuary (Stalk and Lachenauer 6).
The key to doing it successfully is conducting due diligence on the competitor’s performance in the targeted market segment. The most effective way of devastating a competitor’s profit sanctuary is by offering a product that sells at a lower price than that of the competitor (Stalk and Lachenauer 6). This strategy has several legal limitations and a business should operate within the limits of pricing laws.
Plagiarize with pride
Plagiarizing with pride means stealing or copying an idea, improving it, and making it the property of one’s business (Stalk and Lachenauer 7). It involves more than copying an idea because certain ideas are patented and therefore duplicating them is against the law. The idea is improved by incorporating additional concepts in order to make it a different version of the plagiarized idea (Stalk and Lachenauer 7).
Many companies have used this strategy to dominate specific market segments. This strategy is successful because any idea can be implemented in a better way through improvement. Hardball players find ways of improving ideas after copying from other businesses. Another concept of plagiarizing with pride is stealing ideas from unrelated sectors and incorporating them into a business (Stalk and Lachenauer 7). This is an effective strategy for dealing with competitors.
Unleash overwhelming force
This is a hardball strategy that refers to the act of consolidating a company’s resources and directing them towards a single product or idea that the company intends to promote in the market (Stalk and Lachenauer 8). In many instances, overwhelming force is unleashed against a competitor’s profit sanctuary. The strategy works successfully if the company planning to use it has a cost advantage (Stalk and Lachenauer 8).
A disadvantage of poor market research is that it may lead to the total destruction of the company because competitors might lower the prices of their product to resist being overtaken. The strategy must also be implemented with the law to avoid legal fights with competitors. Unleashing overwhelming force requires great strategic thinking and careful implementation that should be based on thorough market research regarding a competitor’s operations and profitability (Stalk and Lachenauer 9).
Focus relentlessly on competitive advantage
Focusing relentlessly on competitive advantage refers to a hardball strategy that involves taking advantage of a company’s strengths by using them to compensate for its weaknesses. An important aspect of using this strategy is knowledge of a business’s competitive advantage. Many hardball players take the aspect of competitive advantage to extremes by implementing strategies that cater to the present and future competitiveness of their businesses (Stalk and Lachenauer 3).
The extreme competitive advantage although legal is sometimes a source of complaints from other businesses because they cannot compete effectively with a business that uses hardball strategies to gain it (Stalk and Lachenauer 4). Extreme competitive advantage involves business aspects such as superior production methods, unique marketing strategies, and highly-developed research methods that generate customer information that is unavailable to other businesses (Stalk and Lachenauer 6). Such strategies cannot be duplicated by other businesses because they are kept secret by the business. Focusing on competitive advantage makes a company invincible because the largest percentage of its resources is channeled towards its business aspect or division that provides a competitive advantage.
Application of hardball strategies in business
Netflix vs. blockbuster
The video and DVD rental business was for a long time dominated by two main players namely Netflix and Blockbuster (Satell par4). However, market players have changed significantly. Netflix used the hardball strategy of devastating rival’s profit sanctuary to dominate the market. The main source of revenue for Blockbuster was video and DVD rental. In order to meet high customer demand, the company built more than 9,000 retail stores in different states across America (Stelter par3).
Customers would drive to the stores to rent videos while others would order DVDs through mail service. A change in service delivery through the embracement of technology changed the market dynamics significantly. Netflix provided a better and more convenient way for customers to acquire DVDs and videos. The company started streaming online TV and videos using advanced technology (Satell par6). Netflix offered customers the convenience of watching videos online without driving to retails stores to acquire DVDs (Satell par7).
In addition, it started streaming TV shows. Within a short period, Blockbuster experienced a decrease in customers because many of them migrated to watching videos and movies online. In 2013, the company announced that it was shutting down after unsuccessfully trying to copy Netflix’s model of online video streaming (Stelter par6). Currently, Netflix has a market capitalization of more than $28 billion and it dominated the market by lowering costs and providing convenient services to customers (Stelter par9).
Apple vs. Xerox
The creation and subsequent exploitation of graphical user interface (GUI) is an example of plagiarizing with pride in the business. Originally, the concept was developed by Xerox. However, after several visits to the company, Steve Jobs stole the idea, improved it, and made it Apple’s (Dernbach par5). The GUI was an important aspect in the growth of the personal computer industry of which Jobs became a key player after stealing the idea.
In addition, he poached engineers from Xerox who customized the idea of the Apple Macintosh (Dernbach par7). Xerox sued Apple for stealing and using their idea. However, the case was dismissed. Xerox could not compete in the personal computer industry because Jobs implemented the idea in ways that endeared the company’s products to consumers. Apple proceeded to use the concept in its personal computing endeavors that generated a lot of revenue. Eventually, the idea propelled the company to the top of the technology industry and made it the most valuable technology corporation (Dernbach par12).
Kmart vs. Wal-Mart
Kmart and Wal-Mart were founded in the same year but currently, the latter dominates the discount retail market. Wal-Mart applied the hardball strategy of focusing relentlessly on competitive advantage to squash competition. The retailer’s competitive advantage is its complex and well-developed supply chain management system (Sanford par3). Wal-Mart competed successfully against Kmart by controlling operating costs. It mastered its supply chain by incorporating innovative strategies such as developing new uses of certain products, tracking the performance of different products in the market, and studying trends in consumer purchases using technology (Sanford par5).
On the other hand, Kmart’s supply chain was devoid of innovation and creativity. Wal-Mart focused on improving its supply chain using technology, which led to breathtaking strategies that gave it an extreme competitive advantage. Today, Kmart specializes inexpensive goods that attract mainly high-income earners. In contrast, Wal-Mart stocks cheap and quality goods that are in high demand among low and middle-income earners (Sanford par9). This has resulted in high growth and profitability as well as dominance in the retail market.
Works Cited
Dernbach, Christoph. Apple and Xerox PARC: Did Steve Jobs Steal Everything from Xerox’s Palo Alto Research Center?. 2012. Web.
Sanford, Roger. Kmart vs. Wal-Mart: A Study in Supply Chain Approaches. 2013. Web.
Satell, Greg. A Look Back at Why Blockbuster Really Failed and Why It Didn’t Have To. 2014. Web.
Stalk, George, and Lachenauer, Rob 2005, Hardball: Five Killer Strategies for Trouncing the Competition. Web.
Stelter, Brian. Internet Kills the Video Store: Blockbuster, Outdone by Netflix, Will Shut Its Stores and DVD Mail Service. 2013. Web.