Managing a Small Business
Competing With The Giants - Streetwise Tips

Streetwise Tips on Competing With The Giants

* Ask your customers
Go ahead and ask your customers what they really want from your business. Ask them how they think your business compares with other businesses—even the giant.

Of course, what you really should do is ask people who patronize the competition what it is your competition is offering that appeals to them. Just don’t conduct your survey on their premises!

And, remember, in responding to surveys, people’s answers often reflect what they think the interviewer wants to hear. Judge responses carefully. Ask the same question in several different ways.

* Avoid the common failure route
One of the most common routes to failure typically taken by a small retailer battling a superstore begins with panic. Then the retailer briefly consoles itself with the notion that customer service and loyalty will keep its clientele from defecting to the large, discount competitor. Then, as customers dwindle, the retailer wakes up from this false security and lowers a few prices here and there as a token cost-cutting incentive. As worries about lost profit margins set in, it then begins to reduce inventories to maintain cash flow.

The small retailer is then left with huge price gaps and huge differences in inventory sizes. Business really begins to plummet, and it slashes prices to the bone in a desperate attempt to attract consumers and ultimately revive its business. But by this time, it is often too late.

Don’t go down this road! Make your first move bold and decisive!

* When to change
Completely and carefully reevaluate your strategy as soon as you hear a superstore is coming—or better yet, reevaluate your strategy today, because chances are that sooner or later you will face superstore competition.

Many small businesses that have been crushed by national firms simply waited too long to change their competitive strategies. Change your strategy, creatively and without panic, as soon as possible to adjust to competitive forces.

* Don’t panic
Some small businesses change their strategy too often when faced with national competition. Don’t panic! Come up with a sound strategy and don’t switch your tactics at the first sign of problems. You need to retain a clear identity throughout the competitor crisis and instill a clear competitive advantage in your customer’s minds.

You can change aspects of your identity now and then if you put a lot of effort into your image change and if the tone of your identity is clear and simple—something that can be easily communicated to your clientele without confusing them. Just don’t continually switch the message you are conveying. Consumers need to be comfortable with where they stand with you. You need to appear reliable.

* Strategies and plans
All firms can benefit from a solid competitive strategy, a unique selling proposition, annual planning, and market planning. But it is imperative for a David-sized firm facing a Goliath-sized competitor to use these tools. It can spell the difference between survival and extinction.

Even if you had a good strategy and plan in place before the giant competitor arrived, you need to reevaluate it once the giant arrives on the scene. Despite the reputation that large national firms have for being slow to make major structural changes, some have an unending slew of new marketing plans waiting in the wings. You had better be able to anticipate such moves and be able to deflect attention from the marketing strategies with winners of your own.

And, most of all, you need to find a means of distinguishing your business from the competitor’s in a very positive and meaningful way.