Clayton Christensen’s ‘The Innovators’ Dilemma’ published two decades ago, showed how good companies could find their business destroyed if they were not very watchful, and he introduced us to the much-abused term “disruption”. One of the main examples he uses is the Japanese motorbike industry. When it tried to enter the U.S. market, its products were not seen as good enough. Yet the small machines that the Japanese employees rode across the hills in frustration at the weekends created quite a buzz and persuaded the Japanese companies to look at trying to sell them. Spurned by the motorcycle distribution system they sold these small bikes in gardening stores and since they were so inferior to those sold in the mainstream market they were ignored.
In such a scenario the new entrant offering inexpensive no-frills product makes its entrance in the market and then quietly starts to move up adding features as it goes. The incumbents’ response is not to compete but to focus harder on the superior end of the market, but the outcome is often – as with the motorbikes – that they get pushed into a niche too small to be viable and they go out of business. Rather like the frogs being warmed in water.
Angered by mislabelling and false claims of plastics
For the last few years our industry has been angered by the mislabelling and false claims of plastics and other competitive materials, with all the injustice that this entails. We are right to fight it, but must not get so obsessed that we forget the fundamentals of our business and miss other threats. The leather industry should be able to walk and chew gum at the same time, and getting angry with competitive claims while letting those same competitors sneak by into the market will not look clever if we do not reverse it. The very fact that some of our raw material is being thrown away, something we thought inconceivable, is evidence that we have lost the early rounds.
The answer lies in full-blooded marketing; not merely communications, but total strategic marketing. There are many tactics to increase the barriers of entry for new entrants, from branding through exclusive contracts to innovation, and many ways to tilt the power balance in terms of substitutes and customers in favour of leather.
Yet we have let the perception arise that leather is a “difficult” material to use, requiring too many highly trained staff, not working well with robotic equipment, creating environmental worries and with highly unpredictable prices. We need to answer every one of these and change the attitude starting to pervade our customers.
Parkour is better than becoming frogs legs
With so many issues arising simultaneously, and others coming at us unexpectedly, the coming years can be viewed like Parkour; a rather crazy activity enjoyed by James Bond which involves racing across uneven terrain. Intended to be all about getting quickly from A to B Parkour has become wrongly identified with sprinting up vertical walls rather than free running and efficiency. According to Jackie Hai, a community organiser at New England Parkour, quoted in the Boston Magazine “Parkour is just a way of looking at your environment through a different lens. You start to see opportunities where once there were obstacles.”
Right now the leather industry is faced with many obstacles, some surfacing in unpredictable ways and we must face each and every one of them as they arise, preferably with a well thought out marketing strategy that can adapt as we run across the terrain. Much better than being like the frogs sitting in tepid water being slowly turned into lunch.
Dr Mike Redwood
August 28, 2019
Follow Dr Mike Redwood on twitter: @michaelredwood
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