Earlier this year, I recall reading a story about a Mumbai based company, Ebrahim Currim & Sons, that had made umbrellas for the Indian masses and done well. India is hot and when it rains during the monsoon season, it pours. However, despite being in the list of poorest countries in the world with millions living on less than a dollar a day, the country still can’t compete with China today. The result: Indian market is being flooded with cheaper alternatives from China and Indian companies are facing the same challenges that we continue to face every day here in areas like cars and IT. This company went back to the drawing board and completely changed its business model and decide to innovate. There are no winners in price wars but innovation may, surprisingly enough, save everyone.
Something similar is happening in Poland. Polish people have traditionally produced some of the finest doilies in the world but in a time when people love buying inexpensive products in Target and Ikea, their use has declined. That is when someone came up with a clever idea. The art and skill behind creating doilies can be employed for another high-value item: women’s lingerie. Yes, on a per square inch basis, the fabric used in women’s underwear is extremely expensive and even more so for items like G-string, thongs, and bras. A new market for high-end, handmade lingerie has been born and everyone is delighted.
Innovation has to be part of the DNA your business. It may sound like a cliche, but every threat to your business is also an opportunity to innovate, and like in these two example, you can actually become more profitable when a competitor tries to compete on price. I think that is a lesson that businesses in all developed countries have to learn – there will always be someone, somewhere who can do it cheaper, better, but if you provide opportunity for innovation, you might thrive.