5 reasons to pick a fight with your biggest competitors

It sounds like suicide picking a fight with a much larger and established competitor (niche or mainstream). How can you possibly expect to win when they’ve more resources, customers and a mature product? You can’t, easily or quickly!

rocky4Rocky IV up against a much bigger and stronger competitor

However there are some good reasons to be compared and associated with the market leaders:

  1. Customer knowledge – Customers have a clear understanding of what an existing product does. They can therefore easily pigeon hole your product into the same or similar category. “oh, your like ACME’s product”. In this way a sale is easier because less explaining is  necessary.
  2. Free-riding education – You can ride on the competitors market education. Educating customers is very, very, very expensive and time consuming. Why not take advantage of someone else’s hard work and cash..
  3. Price comparison – Customers will always want a price comparison. Competition is a good thing. Its good for suppliers because it grows the overall market. It also reassures potential new customers. ‘If this supplier is no good I can always switch to another one.’
  4. Defecting customers – Unhappy or dissatisfied customers will need an alternative. Put yourself in that position and you will catch them. The crumbs from the competitors table maybe healthy loaves to your startup.
  5. Out innovate – Find the weaknesses in the competitors offering and improve it with your own. Many a market leader has been toppled by a much smaller innovative company. Startups are better at innovating than the big market leaders.

A word of warning this strategy may also get you a bloody nose. The competitor has the lions marketshare and so you have to make alot of noise to be heard.  If you do get noticed by the competitor move quickly to establish a position of strength because if they attack it may be a killer blow. You may also start a price war which is ultimately no good for anyone except the customer in the short run.

Competition is a good thing. It demonstrates there is a need in the market for a product or service. Rarely is there an new opportunity without competition. If there is no competitors you have to ask yourself is there really ‘a market in this gap?’ As a small startup you have to out-compete your much larger rivals.

Battling against competitors really requires the Art of War. Strong knowledge, great tactics and an outstanding strategy is needed. Its not easy. Often startups have no choice. The odds are not on your side but that does not mean you won’t be successful. Startups are more agile than established bigger suppliers.

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4 Responses to “5 reasons to pick a fight with your biggest competitors”

  1. Lee Mallabone Says:

    Good plan, but only in moderation.

    I like FakeSteve’s take on the Palm Pre’s attempt to pick a fight with their biggest competitor:
    http://fakesteve.blogspot.com/2009/06/there-will-be-blood.html

    “If this really is your business plan — if you figure you can build a company by winning over some tiny percentage of iPhone users who are unhappy enough to switch — well, I pray for your souls.”

    Lee.

  2. Nick Barker Says:

    Hi Lee

    Thanks for the comment and the great link. I don’t think waring with a competitor can be the sole plan. Some companies have taken this approach. They often end up battling on price. They loose sight of the customer and their changing needs.

    It’s a short term tactic. However in finding a gap in the market you have to move customers from an existing solution. Just as the iPhone has done so well. This needs a product or service that is as much as nine-times better: http://andrewmcafee.org/blog/?p=121.

    The iPhone has met customer latent needs and out innovated the competition. However this has taken a very, very long time to blossom.

    Best

    Nick

  3. Tour De France 2009 & business: Competition is a good thing « Nickpoint Says:

    […] may not always feel this way but competition is a good thing. In sport and business competition brings out the best in our abilities. Competitors help us focus on a target, drives our […]

  4. sports betting champ system Says:

    Just what I needed to take the edge off after a intense day. Excellent article that really gets the idea across. Thank you for sharing.

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