Business is about competition. It is therefore often compared to sport.
Take the Premier League in football. You have leaders, teams which year after year compete for the English title. These are teams like Manchester United, Liverpool, Chelsea and Arsenal. If they do not win the league, they usually obtain the qualification spots for European competitions.
Also in the league, you have ‘Strivers’. These are teams who are competing not to get relegated. Their goal is survival. Some succeed and stay in the league another year: Others fail and exit the league.
There is a third category of team in the league. These are teams who look to challenge the established order by becoming one of the league leadership group. In recent years such teams include Watford, Leicester and Bournemouth. Often these are teams previously seen as unfashionable but which have received significant financial power through a new billionaire owner.
In business the term challenger is often used to describe businesses ‘in the middle of the league’. Such a general description is an incorrect definition of the concept of a challenger firm. There is more to being a challenger than being ‘of the middling sort’. Being a market challenger is as much a state of mind as it is a statement of intent.
I can think of sport’s clubs who are happy to maintain a mid-league position. Owners want a club which breaks even financially and meets its role as a form of entertainment but who do not want to incur the significant costs associated with being in a leadership position.
Similarly there are businesses who do not want market leadership as being a leader costs in terms of defending that position. Being a market leader is often not a position in which profits can be maximised. It costs to be a leader.
To be a market challenger, is to have ambitions which exceed your conventional marketing resources. This means being strategically and tactically bold to overcome the resource gap.
So what are the core challenger characteristics?
- Challengers embrace intelligent naivety. They do not accept the historical norms of a market or its traditional process models. The rules written by others aren’t the challenger’s rules.
- Challengers build a ‘lighthouse identity’. They take and communicate their own position and they are clear where they stand on issues affecting the market. They project that sense to target consumers like the beam of a lighthouse.
- Challengers take thought leadership of their category. Apple isn’t the leader in the mobile phone market; Dyson aren’t the leader in the vacuum cleaner market; but both these companies lead their sectors in terms of design and thought.
- Challengers create symbols of re-evaluation. They seek to continually shake up the consumer’s view of the market or brand category. So Apple and Dyson continually add functionality and features to their products which alter the consumer’s expectations of the category.
- Challengers are willing to sacrifice. Rejection isn’t the fear of challengers. They fear indifference. Be willing to sacrifice that which does not present a strong position to your target audience.
- Challengers are willing to over-commit to build a market position. This over-commitment could be in the form of guerrilla marketing or to go a step further than your competitors to gain a market foothold.
- Challengers use PR and social networks to enter social culture. the use of communications is strategic.
- Challengers become ideas-centred. they need to continually come up with new ideas to keep their presence fresh. They don’t do the same thing over and over again.
Research has shown ten potential challenger narratives. These are:
- The Feisty Underdog: This is the classic challenger narrative. It’s David versus Goliath. It is often the position of the initial market disruptor.
- The Peoples’ Champion: Challengers can develop a market position where they are seen as fighting to make the consumer the real winner. They fight against the market’s ‘cynical fat cats’. Take the mobile phone network Giff Gaff as an example.
- The Missionary: These challengers want to bring a new way of thinking to a market category. An example is The Body Shop which promoted natural and environmentally sound cosmetics manufacturer.
- The Democratiser: This is the Robin Hood challenger wanting to take from the few to give to the many. For example, H & M, the fashion retailer looks to give high fashion looks usually only available to those who can afford designer prices, to the mass market.
- The Enlightened Zagger: These are challengers who divert from the cultural current in a market. When competitors ‘zig’, they ‘zag’. This is a brand by opposition to expected norms not matching the propositions of others.
- The Real and Human Challenger: These challengers are clear to show that there are people behind the brand, not just AI and algorithms. They promote human to human communication. They aim to make a human and emotional connection. There is personal commitment to quality and service.
- The Visionary: These challengers aim to transcend the category. An example is Whole Foods, the American grocery chain which uses the vision statement “Whole Foods, Whole People, Whole Planet”. This statement reflects the triple bottom line of People, Planet, Profit. That business is more than the aggregation of wealth.
- The Next Generation: These challengers look to get consumers to re-evaluate the market. Tesla are an example as it gives an image of the future through alternative energy production and electric vehicles.
- The Game-Changer: These challengers offer a significantly different proposition that changes the market. Such challengers have included Airbnb, and budget airlines such as Ryanair.
As challengers often lack the resources to compete against market leaders head on, they have a duty to be flexible, fleet-of-foot and imaginative. As the nuclear physicist Sir Ernest Rutherford said or UK scientific research, “We have no money, therefore we are obliged to think”.