What is “competition”?
As with strategy, the competition is often loosely defined. When thinking of competition, business owners and managers see it as warfare where businesses are at war with one another trying to win over customers and gain market share. With such an attitude, there is no room for multiple winners; only the alphas prevail. However, this way of thinking is dangerous and flawed.
According to Michael Porter, the decisive aspect of the successful competition is creating unique value, not trying to be the best, or beating your rivals. To achieve superiority in the marketplace, business owners must analyze the competition and understand where they stand (Magretta). The analysis is a two-part process. The first part is understanding the structure of the industry in which competition takes place. The second part is understanding the company’s relative position within the given industry (Magretta). According to Porter, many companies fail to develop suitable strategies because of the misconception of competition and how it works. One of the main misconceptions is a competition to be the best. Porter believes that if you start with this idea in mind, you will develop a flawed strategy that will eventually lead to mediocre performance (Magretta). If you approach the competition by focusing on meeting patient needs instead of demolishing your rivals, you will realize that there is room for more than one winner. Because there are so many needs to serve, there are many ways to win (Magretta).
This concept should apply to every market regardless of the size. From large retail stores to mom and pop shops, and everything in between. Medical laboratories are not immune to competition in the slightest. Sam’s Medical Lab operates in a highly competitive market in FL for over a decade. We have seen new entrants penetrate the market but disperse after a year or two for various reasons. From the inability to deliver on the promise, a lack of funding, and creativity to attract new business, the reasons for failure in the healthcare market are many.
Along with many ways to fail, there are many ways to thrive. Sam’s Medical Lab leverages the latter. In the following posts, I will discuss different methods and critical success factors that help Sam’s Medical Lab gain a competitive advantage.
Magretta, Joan. Understanding Michael Porter: The Essential Guide to Competition and Strategy. Harvard Business Review Press, 2012.