Fast Company

Lock Up Resources And Lock Out The Competition

I’m in Redmond, Wash., right now as I write this, running a workshop for Microsoft. And we have been discussing Apple’s motus operandi of locking up some critical resources before it launches a product. Apple employs this tactic in almost every item it produces.

When Apple launched its first iPod, for example, it signed an exclusive agreement with Toshiba, which prevented competitors from following quickly. Toshiba had developed a revolutionary new hard drive that would allow Apple to introduce an MP3 player that approximated the size of flash-memory-based players but held ten times the number of songs. Apple also locked up music supply by signing exclusive agreements with music labels. The list goes on and on.

PetMD is using this same pattern to its advantage – pattern number 10: remove the firewood from under the pot.

While other similar sites are assembling user-generated content, offering articles and comments written by fellow pet owners, PetMD has taken an entirely different approach. It has invested heavily in gathering high-quality, proprietary content directly from experts. It has commissioned articles written by veterinarians covering a broad range of subjects that pet owners care about.

In a sense, PetMD has attacked the fuel of other sites by creating better quality information that helps its site beat competitors. And the result of using this pattern is that others will have to make a heavy and focused investment in order to steal PetMD’s fire wood.

Owning proprietary content also supports PetMD’s strategy of syndicating its content. Since the content is exclusively owned by PetMD, the company is trading a limited, and therefore valuable, resource. Other sites need reliable information, and they are willing to pay for the quality that PetMD provides.

Ask yourself the following question to see if you can apply this pattern to your company. Can I control the supply of a product, solution or information in order to own a particular niche of my market?

 

Add New Comment

0 Comments