Every small business has to fend off competition, but this becomes particularly daunting when the entrepreneur is competing in a space dominated by a giant multinational — those industry titans whose economies of scale and ubiquity threaten to squeeze out every other player on the field.
However, there are many instances where David defeated Goliath and the entrepreneurs behind these ventures have managed to take away market share and topple the titans. In his forthcoming book “Killing Giants: 10 Strategies to Topple the Goliath in Your Industry,â€ Stephen Denny looks at the successes of such ventures as Boston Beer Co. (the brewer of Sam Adams Boston Lager), South Africa’s Black Like Me cosmetics and some 30 other giant-killing small businesses to create a strategy for toppling the industry juggernaut. Here are four tips he offers:
They can’t crush what they can’t catch: “Anytime we talk about smaller players fighting against giants, speed comes up as an obvious lesson,â€ says Denny. “Mike Cassidy was one of the guys I interviewed. He launched a new update to his instant messenger service, Xfire, on average once every two weeks so by the time his larger competitors — like AOL — got a grip on what this little startup was doing, he had already moved on.â€
Creating arguments that your giant can’t win. Here, Denny cites Herman Mashaba, the founder of Black Like Me cosmetics in South Africa who managed to succeed in an industry dominated by large corporations by crafting a message that states his company is black just like the consumers of the products and has a better understanding of the consumers’ needs. “It’s difficult if you’re the territory manager of a large multinational to somehow stop and try to create a strategy for winning in the townships of South Africa when your competitor is called ‘Black Like Me.’â€ Denny says creating these arguments in the market, hijacking the conversation and creating a discussion in the market where your giant competitor can’t successfully compete is a hallmark in great giant-killer brands.
Being great at one thing is never enough. It’s never about one thing. It’s not just about product aesthetics, it’s also about sustainability. Denny refers to Geoff Ross, founder of 42 Below Vodka in New Zealand who focused on the competitive advantages of high product quality on one side while creating an image that exudes an irreverent, hip attitude — something one doesn’t expect in a high-end vodka brand. “So he created this interesting brand tension between these two seemingly disparate elements and yet they work together very well.â€
Question the givens. A good example of this, Denny says, is German hotel chain Prizeotel. Its founder, Marco Nussbaum, asked, ‘what is it that we casually expect of a hotel and what do we think that’s no longer important?’ And he began to ruthlessly cut things out that didn’t matter anymore. Gone were the landline telephones since virtually all travelers carry cell phones now. As most hotel stays are only one night, they made rooms larger by eliminating closets, offering a place to hang a garment bag, eliminating pay-per-view in favor of free Wi-Fi. “So what he did was created a design hotel that happens to be a budget hotel too — a seeming contradiction,â€ states Denny. “It’s possible because he questioned all the givens.â€
For more small business tips be sure to read…
- 12 things every entrepreneur needs to ask before writing a business plan
- How to build your small business network
- 5 mistakes millionaire entrepreneurs make
- 4 rules for entrepreneurs who are looking for the “next big thing”