The little Gibbon is playing happily in the sun when 180 kilograms of Gorilla rumbles in and parks its ample self beside the tiny ape.
A similar scenario plays out in our backyard when a large national (or increasingly multinational) business enters a market traditionally occupied by a collection of small players.
I spent much of last weekend with a number of Independent Optical Practitioners at the ODMA Fair. These guys are being increasingly challenged by the presence of Gorillas and the big question over the weekend was – “how do we compete?”
It’s an interesting challenge and one that, not surprisingly, bubbles up for every growing business. When it does, your best defence is offence. Focus on building your business and serving your customers rather than diverting energy into defeating your competitor. How do you do that? Here are eight suggestions:
1. Know yourself
Start with a little self-reflection. Decide what you stand for and what you are good at. Articulate this in a very simple way so that employees and customers understand it, remember it and share it.
This sounds like commonsense but experience shows that many businesses don’t do this well.
2. Be yourself
Make sure that what you stand for, and what you are good at, is blindingly obvious to customers.
One of my lasting observations from this weekend was how some of the ‘Independents’ were providing the most fantastic services but had unwittingly turned them into a well-kept secret.
3. Identify your key customer
Identify your best customers. These are the customers who make your business a profitable business. I suggest you undertake some real investigation work – run some numbers – as gut feeling can be a little unreliable here.
4. Understand what your key customer wants from you
Once you have indentified your key customers, understand what they want from you. A few months ago I wrote an article on how to do this.
Then direct all your energy and resources towards innovating specifically for them. As a Gibbon you are much more agile than a Gorilla and closer to the ground. You will be the first to notice when a customer needs change and you will be able to react quickly. Seize the opportunity to offer something new to your customer and leap ahead of your competitor.
5. Know your competitor
You don’t want to spend too much time focussing on your competition, but you do need to be able to understand them.
The best and quickest way to do this is to become one of their customers. Then you will appreciate, firsthand, the strengths and weaknesses of their offering.
6. Pricing
Don’t sign up for a war you can’t win. The Gorilla will out-price you because of the weight they wield when negotiating with suppliers. You must out-value them.
Leverage your advantage: you are small and nimble and can give a customer what they want, when they want it.
7. Local community
If, like the Independent Optical Practitioners, your customer base is largely local, play the community card. It is easier for you to participate in and become a strong player in the community than it is for the Gorilla.
8. Your people
Tap into the energy and commitment of all your employees by making sure they understand the points outlined above. And remember, employees get anxious about their job security when a Gorilla enters the marketplace, so be sure to explain your strategy to them.
A final thought. It is often the case that the Gorilla business destroys the Gibbon business not because the Gorilla squashes them, but rather because the Gibbon gets so distracted by the Gorilla that it fails to look after itself.
Julia Bickerstaff’s expertise is in helping businesses grow profitably. She runs two businesses: Butterfly Coaching, a small advisory firm with a unique approach to assisting SMEs with profitable growth; and The Business Bakery, which helps kitchen table tycoons build their best businesses. Julia is the author of “How to Bake a Business” and was previously a partner at Deloitte. She is a chartered accountant and has a degree in economics from The London School of Economics (London University).
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