By: Michael Fruhling
Does your company currently consider alternative future states which anticipate your competitors’ likely new product introductions? Or, new competitors, not yet known in the market? If not, it should.
Competitive scenario creation and assessment can help inform your company’s strategic and new product planning. This is an area where tech scouting can be valuable. Let’s look at an example from the world of consumer products, which will help to illustrate this point.
Management at Gillette, Schick, Veet and Nair must be anticipating a world that includes premium priced, high tech over-the-counter hair removal devices. For years now, the market has followed P&G’s (owner of Gillette) highly publicized partnership with light device pioneer Palomar. While such a device is not a certainty, it seems likely that one will launch within a few years, considering the time and many millions of dollars that P&G has invested to-date.
Estimates predict a laser device will initially be costly (hundreds of dollars), so it’s initial appeal should be limited to those who can afford its premium price…such as those who currently seek professional light based hair removal services. The professional light-based hair removal market estimated at $2.7 Billion (source: Chain Drug Review) is sufficiently large so as to represent an attractive business, and prices should come down as the device becomes established and competition grows.
For perspective, TRIA has launched a laser based hair removal device in the specialty market at $495 SRP. Further, even at $189 SRP and distribution limited to direct marketing and specialty markets, the NoNo thermal hair removal device already reports 2MM devices sold (see trynono.com). Its entry in the mass market is likely not too far in the future. For perspective, several years ago, the Zeno thermal acne clearning device launched in specialty markets at $129 SRP. It is now being sold at Walmart for $36.
As the market for high performance hair removal devices grows and pricing becomes more competitive, they will have a discernable impact on the professional services market, and to a lesser extent, on topical mass market solutions, over time. Quite likely, the players in both markets are carefully considering these factors and are strategizing accordingly.
As you can see, the longer-term implications of such a product, if it reached the market and started to leverage economies of scale – which would make the product more affordable for the average consumer – could be quite disruptive.
While endless competitive alternative actions are possible, only a few are likely. Has your company considered what these might be, and how to address them, if they come to pass?
Michael Fruhling is the Founder and CEO of bfs innovations, Inc., which provides technology sourcing and open innovation services to organizations. He has 25 years of new business and new product development experience and success with companies including Procter and Gamble, Bristol Myers Squibb/Drackett and Bath and Body Works.