What do you do when you have a major competitor in your backyard? How do you respond to someone with a regional or national or global brand? Or, what do you do when you’re competing against someone who has more money, more marketing, and more boots on the street?
Well, the first thing you do is you choose not to fight them head on (that’s a losing proposition). Instead, you put on your strategy hat and figure out how you can position you and your business to be different … in a way that matters to your prospects and customers/clients.
If you’d like a few ideas concerning how to do that, you’ll want to keep reading.
1. Use Their Strengths Against Them
If you’re a fan of the martial arts, then you know this principle. From Judo to Aikido to Kung Fu, the idea of using your opponent’s strengths is fundamental. Rather than seeing your opponent’s strength as something to be afraid of, you look for the opportunity to use that strength against them.
In the business world, a classic example of this would be Blockbuster. Blockbuster overtook the mom and pop video store market so fast and convincingly that you could find a Blockbuster video store “everywhere.” At the time, they looked invincible. That was, until Netflix came along.
The strength of Blockbuster was their physical presence. They were everywhere. But that physical presence came with a cost—lease costs, triple net costs, utility costs, maintenance costs, etc. On the other hand, Netflix’s online and distribution costs were negligible when compared to Blockbuster’s physical costs—and the rest is history. Netflix used the fact that Blockbuster had a physical presence “everywhere” against them.
So what are the primary strengths of your major competitor? Make a list and see which you can use to turn against them.
2. Look for the Weaknesses in Their Model
When you have an 800 pound gorilla that you’re competing against, it can feel defeating at times. However, you have to mentally prepare yourself to continually look for the weakness in their model. Don’t let bigger and “better” get in your head. Everyone has weaknesses … everyone.
Just as Netflix kicked Blockbuster to the curb, so Redbox has done the same to Netflix. But how? What was/is the weakness in the Netflix model? Timeliness. You have to send in your DVDs and then wait for them to be returned, a process that can take a couple of days. But what if you’re tired and just want to watch a movie right now? You can’t do that with Netflix.
On the other hand, you can’t go back to the Blockbuster model with all those physical costs built into the model. So, what do you do? Well, you scale up quickly to 10,000 unmanned distribution kiosks where people can get a movie right now for just $1/movie … and you place them in locations where people make spur of the moment decisions (like grocery stores and gas stations and pharmacies). Redbox exploited the weakness in the model.
Similarly, I was just leading a strategy session for a company in Minnesota that has an 800 pound gorilla in their target market. As we did their competitive analysis, one of the competitive advantages they decided to capitalize on was to go all in for local. The weakness in their primary competitor was their size and reach, which, by definition meant they couldn’t go all in for local.
On the other hand, the company I was consulting for could. So, that’s what they’re doing. They’re going all in for a local approach. And the best part about that strategic choice is that there’s no way their 800 pound gorilla can counteract that one.
So, what are the weaknesses in the model of your major competitor? Make a list of them and see which you can exploit.
3. Use Your Smaller Size to Outserve Them
No matter how much an 800 pound gorilla says it wants to be the best at customer service, it just can’t be against a smaller competitor that wants to make service their differentiator.
For example, my wife and I both went to Big Ten schools (Wisconsin for me and Ohio State for my wife). We loved our experiences. And there’s no way a small school can compete with what a big school can offer … except when it comes to service.
A classic example of this in our family occurred when our daughter, Chelsea, was driving home from Thanksgiving back in 2009 and got in an accident about an hour away from High Point University in High Point, NC. At the time, HPU had around 3,000 students (vs. the 40,000+ that UW-Madison and OSU had when we were attending college back in the early 80’s).
However, by the time Chelsea arrived on campus a few hours later, after some friends came to get her, there was a gift basket in her room, the resident director was there to comfort her, and I received an email from the President of the University saying, “Bruce, don’t worry about your daughter, we have everything under control. She’s in good hands.” In addition, the next day two of her professors, for whom she had tests that day, wouldn’t allow her to take them. They both said, “Take care of yourself first. You can take your test later this week.”
There’s no way any of that would have happened at UW or OSU. The two presidents of our respective universities didn’t even know we existed. And not only would our professors not have known, it wouldn’t have made any difference (for most of them). We still would have had to take our tests … with our teaching assistants (since most of our freshmen and sophomore classes weren’t taught by professors). In other words, smaller can offer something that bigger can’t.
So, how can you take advantage of your smaller size and outserve your bigger competitor?
Well, there you have it. Three ways you can deal with an 800 pound gorilla. The first two are strategic, and the third is tactical. However, the more important question is, “What are you going to do with your 800 pound gorilla?” What are you going to do differently so you can position yourself to be a different and better option for the people in your target market?
To your accelerated success!
P.S. If you have some other ideas or ways you’ve dealt with an 800 pound gorilla, make sure you add your ideas to the comment section below (or click here >> if you’re reading this by email or RSS feed).
P.P.S. And if you’d like a ton of more ideas about how to better position your business, you’ll want to join me for The Accelerated Growth Conference, which you can read about here >>. See you November 13th-14th!