Most people think that competition in the marketplace is a good thing. After all, it’s competition that drives innovation, lower prices and higher quality products.
But sometimes, especially for smaller companies, the odds seem a little slim. Big companies have all the marketing dollars they need, plenty of admin & HR staff, not to mention a whole complement of contacts that they can draw upon at a moment’s notice. It all makes competing against them feel like when David went up against Goliath.
The great thing about the market, though, is that David can sometimes win. Here are some experts sharing their thoughts on how to use your business’s small size to your advantage.
Not every company is destined to be the next Ebay, James Schrager, a clinical professor of entrepreneurship points out. Yes, there are occasionally enterprises that come along and blow open the market, but usually it’s because they got timing absolutely perfect – in other words, it was luck.
Schrager emphasizes instead the idea that companies should try to be special. He points to a couple of examples. One is the example of Apple computers in the 1980s. While IBM and Microsoft were churning out as many computers as they could to meet demand, Apple went down a very different path. Instead of giving customers a cookie-cutter experience, Apple worked on refining its platform, making something very different to the competition.
The other is the example of Porsche and General Motors. General Motors wanted to produce as many Corvettes as it could in a month so that every American was driving its cars. Meanwhile, much smaller Porsche focused on making its own offering special, with its superior performance, looks, and handling. In the end, it is arguable Porsche, not General Motors, that has been the most successful company.
Compete On Innovation
Carol Ostrow works at the Flea Theatre in New York. She points out that small businesses have the ability to change their direction on a dime, depending on market conditions. They’re able to change their strategy, develop new ideas, pursue new products and secure their IP in a highly fluid way, by going using sites like SecureYourTrademark.com. Larger companies, she says, simply don’t have this freedom. They’re bound by hierarchies, and generating new ideas and new IP is difficult. Plus, their sunk costs are usually a lot higher, meaning that it can be very painful for investors and managers to change course.
Use Your Competitor’s Strengths To Your Advantage
Sharon Hadary is the founder of the Center for Women’s Research at the University of Maryland. Her advice is to spy on your competition, find out the weaknesses in their product, and then use these to your advantage, according to her column at http://www.wsj.com/. Often, she says, small companies can find their competitive edge by finding the one thing that their customers want that larger businesses aren’t providing. Competition, she says, can actually be an opportunity, especially if you partner with a larger company as a subcontractor to fulfill bigger orders.