I love to watch soccer. A very popular sport around the world, it’s popularity is gaining every year in the U.S. Part of the game’s allure is how players will work, and work, and work to move the ball around the field for many minutes – always looking for an opportunity, a crack in the defenses – and then its POUNCE – GO, GO, GO – and if they execute within seconds its a score. And in soccer, often a single goal makes all the difference between winning and losing.
This happens in business as well. There can be extended periods of competition without enormous change. But then, a crack develops, and its time to POUNCE – GO, GO, GO.
The time is now for manufacturers of home appliances. After months of haggling with the government, Whirlpool has acquired Maytag. And the company strategy? Why, to gain synergistic cost benefits by closing the old home office, various plants and laying off thousands. In other words, Whirlpool has publicly committed to a Defend & Extend strategy, which it plans to execute for the next several months. And, since its earnings aren’t what they’d like, they have no choice but to stay committed to this strategy.
So, what should GE (and other appliance manufacturers) do? POUNCE. All of this D&E behavior, including pushing to common systems and focusing on old assets, is creating an enormous opportunity to change the game. Whirlpool will be working hard, but it will be strategically complacent. For the company to succeed it relies on competitors to sit still and let them create the future as a projection of their past. Thus, now is the absolute best time for the competitors to not behave that way. Now is the time to bring out new products, to implement new pricing schemes for retailers and consumers, to increase the ante in advertising and promotion. Anything that will Challenge the old marketplace and evolve it to a new level of competition.
When Whirlpool is least able to do anything about it.
Being Locked-in makes you a competitive target. Once you commit to an old Success Formula, your competition can use it against you. Prepared companies will have White Space projects operating that they can blow into the market and tear the heart right out of your ability to compete. Now is a very risky time for Whirlpool. It’s a great time for their competitors.
