Like the kid who worries at bedtime about what's hiding in the closet, EOs and managers have a recurring nightmare in which they are confronted by the BIG dog, in the form of a well organized corporate competitor. In these horrifying visions, the better known, bigger and stronger "Big Dog" inevitably eats our lunch.
It's time to assign the scary and worrisome image of the Big Dog competitor to the same category of myths as the closet bogey monster. Oh, sure, they're out there, but the risk they present comes mostly from the energy we waste in worrying about them.
The fear the Big Dog inspires is real to the extent we allow it to be so. And in response to the scary presence of the big competitor we sometimes make poor decisions, stupidly positioning ourselves to forfeit the our own competitive
There are strategies to avoid getting crushed by large, well organized and resource rich competitors. The best advice is avoid direct competition. I'm not advocating surrender - just the opposite. To compete successfully pick your fights with the Big Dogs when it is to your advantage (and you have plenty of them), adopt a stealth mode in taking business away from them and compete hard where they are most vulnerable.
Know Yourself
All competition is about relative positions held in a many-dimensional marketplace. Whether you are big or small is not the key to understanding your market position… where you compete in terms of product, geography and level of services is. You need to know for sure where your organization is positioned in relation to those dimensions. Just as importantly you need to know the market spaces occupied by your competitors and the niche your clients perceive yours to be.
The aim is to occupy an unassailable position, closely identified with and connected to a steady client-base (by product/service type, geography and level of service). I know a very successful firm that dominates a peripheral urban market, specializing in good, not great, products. They make a ton of money, are known and respected by their clients and operate well below the radar of the local Big Dogs who cannot and do not want to compete in that market. Even if they did, the costs for a competitor to challenge the "little" dog would be prohibitive and marginally profitable.
Stealth Marketing
That's an unassailable market position and fortunes are to be made gaining a dominant niche in a well, precisely, defined market.
No competitor, except a monopoly, can dominate all the market space and even if they do, their coverage is unstable and vulnerable. Large organizations are always week on their borders and that's where you can slice off some of their marketshare. If you know and understand your competitor's market position, you know where their central unassailable strength lies. Stay away from the center and don't begrudge what they've worked hard to control. Look, instead, to the edges, where they are less equipped to meet client needs, quite likely to provide lower levels of service and less vigilant. Compete there.
Follow the lead of the Japanese auto industry. When they entered the US market in the early 1960s they sought the only position available… the lowest end, inexpensive, under-sized, utilitarian cars and trucks. Early Nissans and Toyotas were hardly luxury cars. For the next three decades the Japanese penetrated the market from the outside-in, using quality as a wedge on Detroit, slowly but surely slicing off higher priced brands… in the end becoming the Big Dog eating Detroit's lunch.
What's most interesting is that Detroit never saw it coming. Like the lobster slowly boiled alive in heating water, the American auto industry was so sure of its market dominance it overlooked, until it was too late, successful incursions from Japanese and Korean auto makers.
Exploit Your Competitor's Vulnerabilities
When it comes to competition, big is definitely not better. Big can mean slow to act (because decisions are made bureaucratically), hard to change (ruled by policy and procedures) and reluctant to offer customized service (their unit costs decrease with standardization). You can, however, respond in moments, you can adapt, you can customize.
There are other advantages on your side. Since many big competitors are nationally based, you always have the advantage of being local. You can exploit your local ties, knowledge and credibility as a competitive advantage.
Let their Big Dogs eat their lunch while you eat your own. When you compete, if you compete, pick do so where your clearly defined local market position (and knowledge), and adaptable style prevail.
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