Most building material manufacturers are too focused on their competition and not enough on their customers. They start with the premise that their product is basically the same as their competitors.
Based on this premise they see their best option is to lower costs. Fewer and lower paid salespeople, smaller marketing budgets and less new product development are the norm.
Profit margins are determined by competitors and customers instead of the manufacturer. A great day for these companies is when a competitor screws up so they get a win by default rather than their own actions.
Making Your Competition Irrelevant
I believe that every company should strive to make their competition irrelevant. The goal should be for your customers to say, “I can’t imagine doing business without you.”
The tech industry is one of the best examples of making competitors irrelevant. They go so far that you could say they create monopolies.
They used to be in the hardware and software business selling things and not solutions. They realized that selling hardware and software would always limit their potential.
Instead of looking at the competition, they focused on the consumer and how to make their life better.
They created new business models and broke rules. Giving products away for free, like Google, selling subscriptions to the cloud instead of hard drives and upending industries as Uber has done to the taxi business are all examples.
The building materials industry is stuck selling things and could learn a lot from the technology industry.
Two books show you how to make your competition irrelevant.
Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers
By Alexander Osterwalder
Zero to One: Notes on Startups, or How to Build the Future
By Peter Thiel and Blake Masters
At least once a year building material companies should take a few days and ask themselves if they are in the right business. A number of “What If” exercises from these books can show you some opportunities to create your own monopoly and make your competition irrelevant.
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