#1: The Art of Counter-Positioning: How Smart Companies Win by Saying No

Discovering the Hidden Strategy Behind Business Success Stories

In the business world, it's easy for companies to get caught up in the race to do more, offer more, and be everywhere at once. But what if I told you that the secret to success might just be in doing less?

That's right, sometimes the key to standing out in a crowded market is to make strategic choices about what not to do.

Imagine you're scrolling through your phone's app store, looking for a new to-do list app. You come across two options.

The first app boasts a dizzying array of features – voice commands, AI-powered suggestions, integrations with every platform under the sun, and a sleek, futuristic interface.

The second app, on the other hand, offers a simple, clean design with just the essential features you need to make and manage your lists.

Which app are you more likely to trust to get the job done without overwhelming you? That's the power of counter-positioning.

Let's take a look at some real-world examples.

Apple, the tech giant, is a master of counter-positioning. While competitors like Samsung churn out a wide range of devices at various price points, Apple focuses on a select few premium products. They say no to extensive customization and an open ecosystem. This laser-sharp focus is a big part of what makes Apple, well, Apple.

Another great example is HDFC Bank, the largest private sector bank in India. While most banks battle out for the hottest lending products in the market, HDFC Bank has said no to all that.

For instance, in the early 2000s right before the 2008 financial crisis, most big banks in India were chasing infrastructure and project loans. However, HDFC Bank was quietly strengthening its retail loans portfolio.

They have repeated this strategy across lending cycles. The result? They've become a lending powerhouse.

HDFC Bank is today known not only for its excellent shareholder returns but also for its best-in-class top-line growth and the lowest bad loans ratio. Despite its huge size, the bank is experiencing massive growth.

Counter-positioning isn't just for big corporations.

Take Narayana Health in India. In building this company, Dr Devi Shetty counter-positioned against other hospitals by choosing not to focus on wealthy patients or fancy facilities. Instead, they zeroed in on efficiently serving the masses with high-volume, low-cost healthcare.

By saying no to the traditional model, they've not only made a profound impact on countless lives but also delivered impressive returns for their investors!

Most transformative high-growth companies have mastered this model—

• Zerodha: This online stock broker counter-positioned against traditional brokers by choosing not to have physical branches, not to offer research reports, and not to have a large sales team. Instead, they focused on a simple, low-cost, online-only model.

• Patanjali Ayurved: Patanjali counter-positioned against multinational FMCG companies by choosing to focus on natural and ayurvedic products, eschewing modern branding and advertising, and emphasizing its Indian roots.

• Page Industries: The licensee for Jockey in India counter-positioned against other innerwear brands by not having a wide range of products, not engaging in heavy discounting, and not using celebrity endorsements. Instead, they focused on product quality, a premium image, and a strong distribution network.

• Bharti Airtel: India's largest telecom company counter-positioned against rivals by not engaging in unsustainable price wars, not offering free services, and not compromising on network quality. Instead, they focused on building a robust network, offering premium services, and maintaining profitability.

• Tata Elxsi: This design and technology services company, has counter-positioned itself in the IT services industry by choosing not to offer a wide array of IT services, instead focusing on niche areas. They have said no to commoditized services and have instead prioritized high-value engagements with clients in specific industries like automotive and healthcare.

These examples demonstrate that counter-positioning isn't just a theoretical concept – it's a proven strategy that can drive real business success.

As an investor, understanding a company's counter-positioning strategy can give you a valuable edge. It's not just about what a company does, but what it chooses not to do.

When a company has the discipline to say no and focus on what truly sets it apart, that's a powerful sign of strategic thinking and potential for long-term success.

So the next time you're analyzing a company, don't just look at the products and services they offer. Look at what they're not offering. Look at where they're choosing not to compete. That's where you might just find the key to their success.

Counter-positioning is like the business version of "less is more". By strategically choosing what to cut out, companies can create a clearer, more compelling identity.

Just like a master sculptor chiselling away the excess to reveal the masterpiece beneath, businesses that excel at counter-positioning can shape a distinct, memorable brand by saying no to the non-essential.

So here's to the power of strategic subtraction and the art of saying no. In a world that often tells us more is better, the companies that dare to do less just might be the ones that end up with more.

Until next time!

Do you know any great examples of counter-positioning in action? Share them in the comments below, and let's keep this conversation going!