How to Succeed in Business Competition with Larger Companies
Among the many challenges a small company faces is business competition with larger companies. But instead of regarding competitors as your "worst enemy," experts say, think of competition as a healthy (if inevitable) factor of the marketplace. Staying ahead of other businesses in your industry keeps you on your toes and forces you to remain focused on ever-changing customer needs. What's more, your startup or established small business does enjoy certain advantages over the so-called "big boys."
"Use to your advantage the fact that a smaller business is more nimble and can adjust more quickly to the market and customer needs," advises Richard Duncan, president of Rich Duncan Construction. "Adaptation is a key to further success; use it to ensure continued demand for your product or service."
Here are several advantages you can exploit to outmaneuver larger companies:
Understand What your Larger Competitors Can and Cannot Do
By their very nature, big companies have the edge when it comes to scale and size. But size also entails certain drawbacks. When important decisions have to be made, bureaucratic inertia frequently sets in—simply because more people in more departments must be consulted before any action can be taken (which in turn generates more meetings, paperwork, etc.). A small business, by comparison, should be able to make key decisions or switch directions much more quickly.
Commit to More Rapid Product Development
That same bureaucracy in big companies often stifles—or at least significantly slows down—successful product updates and innovation. A small business that's nimble and responsive to shifts in the marketplace can achieve the same objective in much less time. You can fine-tune an existing product or service or look to introduce something new without all the focus groups, levels of approval, etc., required by your business competition. Market entry is generally easier when the product is aimed at a small, niche audience.
Offer a Personal Touch the Big Boys Can't Match
It's difficult, if not impossible, for a large company to offer personalized customer service the way a small business can. If you're doing things right, you're already keenly aware of your top customers and know their needs and the challenges they face. "Small businesses have the opportunity to get as personal as possible with their clients and customers, allowing for a more relationship-based selling approach," notes business strategist Chris Brogan. "This leads to better long-term retention as well as improved referrals."
Seek Out Partnering Opportunities
Small businesses with limited marketing and advertising budgets can benefit from partnering with another small business. By focusing on areas where collaboration leads to a competitive advantage, such strategic alliances can lead to expanded audience reach, enhanced content marketing, opportunities for new product development, etc.
Before embarking on a partnership, ask these questions, says Fran Tarkenton, former NFL quarterback and founder of Tarkenton Companies: "What do they want from you, and what will they give in return? Most importantly, how can you create value for each other? By adopting their perspective, you'll approach the partnership more productively. Look for partners who do the same."
Make the Most Out of Existing Customers
A successful small business can boast a legion of existing customers. To compete against larger companies, look for ways to encourage repeat business from these customers. Offer special "customer appreciation discounts" or loyalty programs where they can earn points for future purchases.
Also, says marketing specialist Ramon Ray, don't be shy about recruiting new customers through existing ones: " ... simply encouraging and incentivizing existing customers to tell their friends about your business is a cost-effective method to attracting first-time shoppers to your small business website."
Many big companies have a hard time defining their corporate culture and how best to attract and retain customers. Small business owners who adopt a personal approach—as well as a readiness to jump on new trends and customer preferences—can seize the moment and exploit their "smallness" to get ahead in the marketplace.