Like athletes, the most successful businesses thrive under competitive pressure.
To them, rivals are not obstacles, they’re opportunities.
True competition, claims Anita Williams Woolley, associate professor at Carnegie Mellon University’s business school, can be very motivating. There are plenty of bitter corporate feuds that illustrate this point: Coke vs Pepsi, Apple vs Microsoft, Visa vs MasterCard.
Here’s what accountants can learn from the best business rivalries.
1. KODAK VS FUJIFILM
In the 1970s, Kodak accounted for 90% of film and 85% of camera sales in the US. Then came digital photos and smartphones, which replaced film and cameras. Kodak’s revenues fell from a peak of $16bn in 1996 to just $6.2bn in 2011.
Its old rival Fujifilm, meanwhile, transformed itself by switching to digital and developing new business lines. Today Fujifilm’s market cap is $19bn; Kodak’s $700m.
Adapt or fall behind.
Whether you adjust quickly enough to emerging technologies will decide whether you stay in business or go bust, says Alva Taylor, director of the Center for Digital Strategies at Dartmouth College: “Digital has changed everything.” New technology in the bookkeeping sector is having just as dramatic an effect.
Kodak is a picture-perfect example of what you need to avoid.
2. BLUE ORIGIN VS SPACEX
Blue Origin and SpaceX’s fierce rivalry transcends the boundaries of earthly markets; they’re competing for the universe.
The entrepreneurial aerospace outfits are fighting to attract talent, funding, launch the best orbital spacecraft and to make history.
When SpaceX successfully landed the first-stage booster of its Falcon 9, last year, Blue Origin boss Jeff Bezos jeered on Twitter: “Welcome to the club!”
Keep pushing to improve.
Rather than hindering each other’s progress, both companies provide fuel for the other’s rockets. Blue Orbit reckons it can transport tourists to space by 2018; SpaceX responded recently by saying it would attempt to send an unmanned spacecraft to Mars the same year.
Rivalries can maximize potential. You should use a competitor to test assumptions and explore what is possible.
Life is not a zero-sum game — neither the bookkeeping markets.
3. COCA-COLA VS PEPSI
Such is the legendary rivalry between Coca-Cola and Pepsi that media outlets coined the phrase “Cola Wars” in the 1980s.
Worried about losing market share to their arch-rival, the two businesses have matched eachother drink for drink looking for sources of revenue. Today, US soda consumption has fallen flat; it’s dropped to a 30-year low. However,Coca-Cola remains America’s favourite drink and the company is worth $31bn more than Pepsi.
Target new markets to differentiate.
Accountancy isn’t just one market. Small business bookkeeping, for instance, is the new prize for even the biggest auditors; fast-growing start-ups need oversight of their finances but have little time for accounts.
There will always be those looking for the expert services of a bookkeeper, it’s just a matter of connecting with them.
4. MARVEL VS DC COMICS
Bear with me!
Marvel and DC Comics compete in both the real world and in readers’ imaginations. In 1996, they launched a joint series of duels: Aquaman against Namor, Elektra versus Catwoman.
But more recently, they’ve gone from rivals to partners. Characters from both comic universes have joined forces; Batman and Wolverine for example, teamed up to become Dark Claw. Some speculate this sporadic partnership may extend to the big screen. Movies have been money printing machines for Marvel — Captain America: Civil War grossed $400m.
Competition can provide fruitful alliances.
By creating partnerships with like-minded companies, you can expand your market, share technology and tools, and better educate consumers. You may even merge or acquire your biggest competitors. Think Uber and Didi Chuxing.
Keep an eye out in your network for other practices with specialities that complement your own and see how you can provide an even better service to your clients.
Competition is a strong motivator and, like athletes, the best companies will flourish under stress. Rivals will push each other to new heights — or planets. But fail to compete effectively and you’ll end up like Kodak — fading away, like an old photo.