As a life-long student of Peter Drucker, I am always amazed and fascinated by his keen observations and creative interpretations of business and the market. One such interesting term I came across is Entrepreneurial Judo and something I want to speak on here in this small article.
What is Entrepreneurial Judo?
It is an exploitation of a business that has market dominance, by another business.
Plants foot, Opponent surges forward. Flip slam.
One can look to the 70s when Sony’s president Akio Morita bought the patent from Bell labs for the transistor. Sony started manufacturing cheap radios in the 80s. By the end of that decade Sony took over the radio market beating American manufacturers such as RCA and GE.
Several Japanese companies over the next few decades would find exploits in the businesses of leaders in the marketplace and take sizeable market shares. But the Japanese were not the only ones to do this.
So how does one find and exploit a weakness in the marketplace?
Look for one or several of these 5 common bad habits of big enterprises.
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Invention Arrogance. A term more understood as “not invented here”. If a company believes only they can truly invent and innovate and nothing good comes from anywhere else, there is a critical flaw in their thinking.
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Only going for the whales. This is picking only the big clients who are the largest customers in the marketplace. This is also known as “creaming”. The whole market must be served, not just the large clients. Doing this will lead to loss of market share.
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The belief in “Quality”. As Mr. Drucker so wisely puts it “Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for.” Do not let the arrogance of your craftsmanship destroy your market share. People will pay for something that is both useful and gives them value. Even luxury brands must be careful not to price themselves out of the market.
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Setting a “Premium” price. Doing this puts a target on your back by competitors. While premium prices increase your average order value, it can become a boon to competitors looking to unseat you and offering their services at a lower cost.
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Maximizing vs. Optimizing. A lot of companies seek to offer other services to their customers instead of making sure what they are doing is optimized. This can lead to their downfall as trying to do everything will satisfy no one. It is better to focus on niche customers and optimize their customer experience than trying to be the be all and end all for everyone.
Just like in Judo, with Entrepreneurial Judo you must establish firm ground for your business first. Do not seek to disrupt the marketplace until you have secured a small portion of the marketplace. Once you are secure in the market in your small area, attack other parts of the market until you hold dominance.
This strategy requires some innovation by the business. You must do more than offer the same product at a cheaper cost. While rule number 4 is good, it must be combined with another or several others as well as genuine innovations in features.
“Hit them where they aren’t.” Is the motto for this article. Heed these words as you build your business and go forward to take market share.
