Asymmetries: why the biggest threats to your business are often the least obvious ones
At Verve, we spend a lot of time thinking about asymmetries. Sometimes it’s in the context of PowerPoint slides, but often it’s in the context of business models. We’re so interested in asymmetries because asymmetric threats to your business are often the most dangerous ones. They’re the ones that don’t just make your market marginally more competitive, they transform it and disrupt your entire business model in the process. They don’t just rock the boat, they capsize it.
They’re also unnervingly hard to spot (at least initially, hindsight is a wonderful thing). We’re getting ahead of ourselves though. Let’s start with what we mean by asymmetry:
- Asymmetric disruption can come from start-ups within your category, or non-traditional competitors from adjacent categories
- They may not have your resources or category understanding, but compete by changing the basis of competition in your market
- By differentiating on new product / service features, they’re able to commoditise the existing ones where your core competencies lie
- This means they often don’t register as a direct threat, and can even benefit you (e.g. by bringing new consumers into the market)
- An immediate competitive response is therefore delayed in favour of continuing to focus on core competencies
- Meanwhile, the new entrant is learning and building rapidly along the new competitive axis, entrenching their advantage
- By the time the changing basis of competition is acknowledged, it’s too late to effectively react to it
This process is often enabled by changing technology, and the history of technology in particular is littered with case studies of asymmetrical disruption (consider the shape of the mobile phone market before and after Apple launched the iPhone).
All of which means if your category is currently undergoing significant technological change (automotive, health, financial services: we’re looking at you) the threat from asymmetric competitors has never been higher.
So what should you be doing about it?
Well as bare minimum, you should be evaluating asymmetric threats on an ongoing basis:
One: Map out where you are
To identify asymmetric threats, you first need to understand what business you’re in. This is not your current portfolio of products and services! It’s the underlying needs and motivations of the customers that use them: what are the core issues you’re helping them address?
Two: Observe what else is there
Seek out all the other ways that people are achieving those same goals. This is not just what your direct competitors are doing at the moment! It’s where start-ups are clustering, and what’s going on in adjacent categories. Are there emergent consumer attitudes or behaviours that hint at new, different ways of solving the same problems? Ignore current scale, and focus on how effectively needs are being met.
Three: Project everything forwards
Consider directional trends. In your category, what is being commoditised and where are the new opportunities to differentiate? In terms of wider consumer behaviour, how is our relationship with brands evolving and what role is technology playing? In the context of all of this: how do your core competencies compare to those of asymmetric competitors? Who is aligned better with these trends, and what does that mean for how your market will evolve?
Four: Decide whether and how to react
Building new core competencies is hard and it takes a long time. Ultimately, you need to use all the information you’ve collected to spot the right asymmetric threats and you need to do it early enough to buy the time necessary for an effective competitive response.
The good news is, we’re here to help. Verve’s expertise lies in unpicking how people make decisions, and we have a range of tools which can be combined to build research programmes that surface, observe and evaluate potential asymmetric threats to your business:
- Using implicit techniques and consumer immersion to establish underlying needs and motivations
- Using social listening and ethnography to highlight and understand emergent asymmetric threats
- Using desk research and expert interviews to evaluate these in the context of wider market and consumer trends
Taken together (and alongside your detailed understanding of your own business and category) these constitute the key inputs for evaluating asymmetric threats, and deciding how to react. We strongly believe that our position as an independent research agency — allowing us to observe consumer motivations and behaviour across categories — puts us in the best position to provide relevant insight, and consult on appropriate responses.
Why not pop by for a coffee to discuss it in more detail? The clock is already ticking…