Subscribe to Entrepreneur for $5
Subscribe

This Is What You Really Need to Do to Stay Ahead of the Competition

Your business strategy is only valuable if you can adapt it to changing circumstances. This is no easy feat – many iconic brands haven't managed it.

By
Opinions expressed by Entrepreneur contributors are their own.

Talk to any investor and one of the first things he or she will ask you about your business is, “What’s your strategy?” Investors want to know how you plan to win in the marketplace and, in the process, meet their financial expectations. When they evaluate risk, your battle plan is front and center.

But as Dwight D. Eisenhower put it, “In preparing for battle, I have always found that plans are useless but planning is indispensable.” His point was that, in the middle of a fight (or the shifting market), circumstances can force you to embrace different actions or tactics than you had planned. If those circumstances are especially heated or volatile, you might even have to toss your original strategy to the wind and come up with an entirely new one. You have to be prepared, equip yourself with reasonable contingencies and be willing to adapt as the situation unfolds. In fact, surviving in a rapidly transforming business world depends on it.

Related: Strategy Vs. Execution: Which Is More Important to Your Company's Success?

Being big doesn’t always save you…

In the real world, even big companies have fallen because they struggled to let go of their original tactics and strategies. Blockbuster, Kodak and Blackberry all fall into this group. 

When Netflix founder Reed Hastings pitched a partnership to Blockbuster CEO John Antioco, Blockbuster ultimately rejected the offer and stuck with its initial revenue model that relied heavily on collecting customer late fees. Blockbuster didn’t anticipate that Netflix’s new disc-by-mail, no-late-fee framework would see the marketplace adoption that it did. Combined with other internal cultural problems, the decision resulted in Blockbuster going bankrupt in just five years.

Kodak also broke due to a failure to bend. As Scott Anthony points out in Harvard Business Review, the business was not averse to adopting new technology. In fact, Kodak spent billions to develop different digital cameras. The company even grasped that people wanted to share photos online. But much of its innovation was mired in mismanagement. Kodak's original model also focused on allowing camera consumables (i.e., film, printing sheets), not their cameras, to drive profits. When it was clear customers had pivoted and that online photo sharing was the new standard, Kodak’s leaders tried to rebrand the company as a commercial printing business to keep leaning on the consumables infrastructure they already had, rather than truly changing their model.

Finally, there’s Blackberry. The business developed a mobile-suitable QWERTY keyboard, which became a much-beloved (including by yours truly) icon. The company even launched a smartphone, the Blackberry 957, in 2000. But when the iPhone hit the market, Blackberry dismissed it as being “playful” and targeted at younger buyers. But business leaders, who made up Blackberry’s core market, snapped the iPhones and similarly featured android-based smartphones up. Blackberry kept trying to improve device features — including the physical keyboard — to cater to professionals doing specific work tasks, rather than seeing the market that was converging personal and work devices; soon, the days of carrying two devices would be gone. Device models focused on retaining their core business users came to the market too slowly and didn’t function well enough. Today, Blackberry doesn’t compete in the smartphone market at all.

Related: Defense to Offense: Leveling Up Your Business Strategy in the New World

…But adaptive teams live to fight another day

Even though many companies have perished from being too rigid, others — i.e., Western Union, Nintendo and Apple — have done a seemingly good job of switching their swords from their right hand to their left and pushing forward on the battlefield on a new path. 

Western Union started out in 1851 offering telegraph services. But the business saw that the real power in the telegraph or general communications was how it linked individuals together. As stated on its website, from its “earliest beginnings, Western Union has advanced technology to connect people.” So over the course of the company’s history, Western Union explored a full range of products and services within that niche, such as teletypewriters and teleprinters, satellites, telegrams and mailgrams. This included money order services. As technology spun in different directions, Western Union let go of most of its communications assets and leaned into financial services as its primary focus. But the company continues to maintain that the intent behind those financial services is to bring people together and, subsequently, improve lives — it's the same vision, but a different path of implementation.

Nintendo started out producing playing cards in 1889. In the 1960s, the company started manufacturing other games. By the 1970s, Nintendo embraced electronic toy technologies and started bringing machines to arcades. Since then, the business has explored multiple consoles, chips and accessories. Within those offerings, Nintendo also looked at broader lifestyle needs and wants, such as improving fitness, learning to cook and playing instruments. Nintendo's willingness to see new game possibilities and try virtually any new technology, paired with a good awareness of how people actually live and play, has kept the company relevant for decades.

Apple founders Steve Jobs and Stephen Wozniak started out dreaming of building their own computers. But what really made that dream a success was that Apple supported other related innovations that made the computers more practical and functional, such as laser printers and software databases. The business also saw how computing could be applied in many contexts. This led to products like the iPod and iTunes (music), smartwatches and the iconic iPhone (communications). Today, the business is using the hardware infrastructure it built to support other options that are primarily subscription-based, such as news, credit cards and gaming/television. Apple has accepted a new, more membership-oriented model that helps support more physical sales.

Related: Use This Simple Military Strategy to Boost Your Success

How capable of switching gears are you right now?

Every business needs to plan and develop a strategy to operate competitively. This holds true no matter what stage — startup, midsize or large business — you’re at. Markets, like battles, frequently go off script, however. The stories above demonstrate that failure or success in those circumstances depends largely on your ability to exchange tactics and strategies in the moment. To be truly prepared, analyze your ability to pivot and don’t get too attached to the strategy life might require you to pitch. 

Entrepreneur Editors' Picks