We like to view the world in black and white, good and bad, friend and foe. But as industry lines blur,such clear distinctions become even more difficult to see within ourcomplex reality. This creates an opportunity for those willing to seizeit. You can befriend enemies.
Vistaprint, the printing giant that I started covering last week, is actively doing this. The company basically deals with four types of competitors:
1. Traditional printers, like Consolidated Graphics
2. Office supply retailers like Staples, OfficeMax, and even FedEx Office (formerly Kinkos) with on-site print stations that serve small businesses
3. Homeprinting by small businesses that can buy new workstations fromHewlett-Packard and other computer companies and print on an as-neededbasis
4. Other small technology start-ups that offer competing services
Vistaprint’smanagement has found a way to deal with each competitor to ensure itsown success. By keeping a close eye on the small tech companies, italso uses its scale – two massive printing plants in the U.S. andEurope – to achieve economies of scale that are difficult for start-upsto match.
Similarly, it pays attention to emerging home printing technologies. By offering better pricing and better quality than at-home print jobs, Vistaprint takes the guess work, effort and time out of preparing professional marketing pieces for small businesses.
To compete with OfficeMax and its peers, Vistaprint has adjusted its strategy to become helpful. These local, on-site companies seem to be the biggest threat to Vistaprint’s small business target audience, so Vistaprint’s management has used an unorthodox approach to maintain and grow its market share.
Instead of taking these companies head on and trying to attack their turf, Vistaprint has offered a lending hand to its competitors. It has signed agreements with many of these companies to offer Vistaprint’s services as a white label service.
Thatmeans when you go to such stores you may find a kiosk, branded as thatretailer’s own service, that allows customers to design and printbusiness cards, folders, and other products. But what you do not see isthat Vistaprint is the one taking that order, preparing the files and running the printing jobs. You don’t know it, but you are actually using Vistaprint services.
This is helpful to OfficeMaxand its peers because it allows them to quickly provide a competitiveservice at a lower cost. But it also preempts potential competition. AsWendy Cebula, Vistaprint’s president of North America, explained to me,“One chunk of the market will be taken by OfficeMax, OfficeDepot, andthe like. But we have partnerships with OfficeMax and FedEx Office andalso with Viking (Office Depot’s EU division) … one way for competitorsto get into our space is to partner with Kinkos. So it’s great offense and great defense.”
Thetraditional printers operate from an older view of competition and sonaturally adopt patterns of competitive behavior that are fundamentallydifferent than Vistaprint’s. Where they see scale, Vistaprint sees technology. Where they see direct competition, Vistaprint befriends an enemy. By blending black and white, Vistaprint creates a huge gray space of powerful competitive advantage.
Ask yourself the questions below to see how you can develop an unexpected advantage by befriending a foe.
1. Who are my direct and my indirect competitors?
2. What do we produce that is different or better?
3. Is there a way to share information, products or services with an indirect competitor to attack a direct competitor?
4. Is one of my direct competitors a company that can help mine?
5. How could I partner with my strongest competitors take over our industry?