The Copycat Business Plan

Any reader of Daring Fireball knows that one of the more interesting/annoying/unbelievable/sad things going in tech is the copycat business strategy. The strategy where company B sees company X doing thing Y, therefore company B decides that they too can find success in doing thing Y.

This certainly isn’t a new strategy, but I think the way that Samsung (and Acer now too) have been implementing this is pretty interesting. For the most part Samsung has resided to copying design facets of Apple’s products. Whereby “facets” I really mean Samsung as gone down the rabbit hole of just copying the actual hardware designs of Apple devices.

That by itself is just a sad fact, not very interesting. I believe that the hardware design of Apple products is only 30% of what makes those products “good” and therefore copying just the hardware design doesn’t actually help as much as Samsung might think.

With the recent Samsung announcement of an Airplay clone and Acer’s of the AcerCloud I think things are about to get much more, well, dirty — because now these companies (Samsung especially) are getting closer to a full copycat strategy — something we can easily see with Coke and Pepsi.

Pepsi v. Coke

If Wikipedia is to be believed, then Coca-Cola was introduced in 1886, followed by Pepsi in 1898. So Coke was first and then Pepsi came along to rip it off.

(For the sake of this please try to shake off your personal preference for either drink for a moment — that’s not at play right now.)

What’s interesting about the Pepsi versus Coke struggle is that they both are so very similar, that in the U.S. it is mostly a wash between the two. Now I don’t have any evidence to support this, but here is what I was taught in my business classes in college: In the U.S. one decade Coke will be ahead, the next Pepsi.

I don’t fully believe that statement, and in fact searching the web seems to turn up evidence that Coke is number one followed by Diet Coke in the U.S., even so Pepsi and Coke are very close to one another and for the sake of this argument it’s not entirely important. Both are successful companies.

What’s really important is how the two are competing. Pepsi and Coke clearly taste different to those that care, but the amount of people that actually prefer one to the other — probably don’t really prefer it because of the taste. That’s why the “Pepsi Challenge” is so interesting. Pepsi usually wins in a side by side taste test, but is clearly not the more popular drink. 1

I am going to go ahead and say that most Americans don’t have a strong enough opinion to matter towards the taste of one over the other. A persons personal preference then isn’t something that most people will change their mind over if in a restaurant and they are told they can’t get the brand they prefer.

Cola seems to largely to just be cola to most Americans.

In fact the real competition for the two cola’s is done with marketing and nostalgia. A persons preference is usually from either good commercials that are swaying those on the fence from one to the other, or nostalgia of Coke/Pepsi “being the drink I grew up with” that keeps the non-fence-riders firmly in one camp or the other. That’s where most preference comes from — certainly where mine comes from.

Another important factor is that both colas are priced the same, eliminating price as a decision factor. 2 Something that is also the case in the cellphone market.

This is relevant here because I don’t think a Samsung phone that looks like an iPhone 3G S will largely be accepted by most users as a sufficient equivalent to the iPhone in the same way that Coke and Pepsi are “sufficient” equivalents for cola to most people.

So unlike the Pepsi and Coke battle, Samsung is just selling a can that looks like the Apple can, but that tastes more like RC Cola. That’s not a winning strategy and it is not fully embracing the copycat business strategy that has worked so well for Pepsi.

However, with the recent introduction of cloud services by Samsung they are taking a huge step towards improving the “taste” of their offering. Essentially Samsung is beginning to fully embrace the copycat business strategy — to the point where they may actually make it successful.

If a consumer can buy a Samsung phone that looks like an iPhone and has the same bullet points as an iPhone (as far as extra services like iCloud go) — then it really just comes down to which phone seems like the better choice.

And when a consumer has to pick based on what seems best, well that’s when you start getting into the Coke v. Pepsi conundrum.

That’s interesting.

Samsung used to only copy the hardware design and that was a half-assed solution. Because Samsung can’t copy iOS that well with Android they have started to copy some of the things that Apple gives its users for free: iCloud. That’s why the entry into cloud services by Samsung and Acer is so interesting, it’s how these two companies are completing their copycat strategy — a strategy that has been proven to be pretty effective for Pepsi.

  1. See criticisms on the Wiki page, because there are some important ones.
  2. Excluding periodic sales.
Originally posted for members on: January 9, 2012
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