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| Building Monopoly In your Business |
Hello Readers,
In todays scenario the buzz word on every individual mouth is STARTUP.I seems quite fancy and simple but it's not. It's a well known fact that if you have to run your business for a long term then creating monopoly in your business is very important.
So in this Post we will talk about Building a monopoly in businesses.
Brand,scale,network effects and technology in some combination define a monopoly; but to get them to work,you need to choose your market carefully and expand deliberately.
Let's have a look on few strategy to create monopoly in your business:
1.Start small and Monopolize
Every startup is small at the start.Every monopoly dominates a large share of it's market. Therefore,every startup should start with a very small market.Always err on the side of starting too small.The reason is simple: it's easier to dominate a small market than a large one.If you think your initial market might be too big,it almost certainly is.(small doesn't mean non-existent).The perfect target market for a startup is a small group of particular people concentrated together and served by few or no competitor.Any big market is a bad choice, and a big market already served by competing companies is even worse.This is why it's always a red flag when entrepreneur talk about getting 1% of a $100 billion market .In practice a large market will either lack a good starting point or it will be open to competition,so it's hard to ever reach that 1%.And if you succeed in gaining a small foothold you'll have to be satisfied with keeping the lights on: cut-throat competition means your profit will be zero.
2.Scaling up
Once you create and dominate a niche market,then you should gradually expand into related and slightly broader market.
This can be learnt from Amazon .
Jeff bezos's founding vision was to dominate all of the online retail,but he very deliberately started with books.There were millions of books to catalog but one thing was very common in them that their shapes and sizes were more or less same so it made the shipping and handling processes easy.Amazon became the dominant solution for anyone located far from a bookstore or seeking something unusual.Amazon then had two options: expand the number of people who read books, or expand to adjcent markets.They chose the second option, starting with most similar market: CDs, videos, and softwarea. Amazon continued to add categories gradually until it had become the world's general store. The name itself brilliantly encapsulated the company's scaling strategy. The biodiversity of the Amazon rain forest reflected Amazon's first goal of cataloging every books in the world, and now it stands for every kind of things in the world.
Sometimes there are hidden obstacles to scaling. Sequencing markets correctly is underrated, and it takes discipline to expand gradually.The most successful companies make the core progression - to first dominate a specific niche and then scale to the adjacent markets.
This can be learnt from Amazon .
Jeff bezos's founding vision was to dominate all of the online retail,but he very deliberately started with books.There were millions of books to catalog but one thing was very common in them that their shapes and sizes were more or less same so it made the shipping and handling processes easy.Amazon became the dominant solution for anyone located far from a bookstore or seeking something unusual.Amazon then had two options: expand the number of people who read books, or expand to adjcent markets.They chose the second option, starting with most similar market: CDs, videos, and softwarea. Amazon continued to add categories gradually until it had become the world's general store. The name itself brilliantly encapsulated the company's scaling strategy. The biodiversity of the Amazon rain forest reflected Amazon's first goal of cataloging every books in the world, and now it stands for every kind of things in the world.
Sometimes there are hidden obstacles to scaling. Sequencing markets correctly is underrated, and it takes discipline to expand gradually.The most successful companies make the core progression - to first dominate a specific niche and then scale to the adjacent markets.
3.Dont Disrupt
"Disruption" was a term of art to describe how a firm can use new technology to introduce a low-end products at low prices, improve the product over time, and eventually overtake even the premium products offered by incumbent companies using older technology.
However, Disruption has recentely transmogrified into a self-congratulatory buzzword for anything posing as trendy and new.This seemingly trivial fad matters because it distorts an entrepreneur's self-understanding in an inherently competitive way.The concept was coined to describe threats to incumbent companies, startups obsession with disruption means they see themselves through older firm's eyes.But if you want to make truely something new, the act of creation is far more important than the old industries that might not like what you create.Indeed, if your company an be summed up by it's opposition to already existing firm's, it can't be completely new and it's probably not going to become a monopoly.
Disruption also attracts attention: disruptors are people who look for trouble and find it.Disruptive kids get sent to the principal's office. Disruptive companies often pick flights they can't win. Think of Napster: the name itself meant trouble . As you craft a plan to expand to adjacent markets, don't disrupt: avoid competition as much as possible.
However, Disruption has recentely transmogrified into a self-congratulatory buzzword for anything posing as trendy and new.This seemingly trivial fad matters because it distorts an entrepreneur's self-understanding in an inherently competitive way.The concept was coined to describe threats to incumbent companies, startups obsession with disruption means they see themselves through older firm's eyes.But if you want to make truely something new, the act of creation is far more important than the old industries that might not like what you create.Indeed, if your company an be summed up by it's opposition to already existing firm's, it can't be completely new and it's probably not going to become a monopoly.
Disruption also attracts attention: disruptors are people who look for trouble and find it.Disruptive kids get sent to the principal's office. Disruptive companies often pick flights they can't win. Think of Napster: the name itself meant trouble . As you craft a plan to expand to adjacent markets, don't disrupt: avoid competition as much as possible.
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