Survival strategies for future market leaders

With the recent and timely celebration the other week of the birth of the grandfather of creationism, Charles Darwin, his revolutionary concept of survival of the fittest seems a fitting description of how the global retail markets currently find themselves.

Much talk (if not all) from retailers at the moment is centred around their looking inwards, at their current operating models, and attempting to understand where they can either cut costs or run a tighter, leaner business. Additionally nearly all retailers are also trying to stick to what they do best, understanding what their customers want and making sure that they deliver it to them, in a timely and efficient manner.

However, in a shrinking market where the customer and more importantly, their cash is increasingly king, most retailers also then look at their position in the market and benchmark themselves against their competitors. This exercise is done for the retailers to gauge whether they are either matching, or beating those rivals in the race for the customers' cash.

Who wins this race is not necessarily clear until the markets stabilise a little and the dust settles from those that were not so fortunate. There is an argument however that suggests going head-to-head like this is not necessarily the most rewarding path to long-term growth. It's not so much survival of the fittest, but more like hanging on in there and seeing what everyone else is up to; making sure we're doing the same, but also doing anything too different or alternative that might damage our market position .

When companies, especially a group of like-minded retailers, all focus on the same thing, i.e. each other, the results are usually seen in some slight incremental adjustments to sales and margin, or a possible shift in market share.

However, during these tougher times, the reality is that diminishing margins and tighter cost accounting are probably the main areas of business control that kept their business stable, as opposed to any real movement in market share or competitive advantage over their rivals. So if directly targeting your rivals is not the answer, what is?

Well, there is a school of thought that suggests that radically changing your business model away from the pack and towards an alternative take on the norm can offer significant increases in market share and at the same time radically alter the dynamic of the market.

The difference will be their approach in not trying to match or stay ahead of the competition, but in seeing what the competition is doing and fundamentally moving away from it, towards a new innovative field of strategic growth.

- The writer is Head of Retail Services, GRMC Advisory Services.