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Competitive Strategy for Small Businesses How do you Compete Against the Big Companies
By: Adrian Pepper
A client surprised me yesterday when he asked, "The business world is dominated by big corporations, so how can we survive, let alone compete against them?"
What pressures do you feel?
We discussed how big suppliers and customers squeeze small businesses using the Internet, world trade and cross-border expansion to gain economies of scale in production and sales and to draw in ever-cheaper supplies. It seemed to him that as soon as he makes profit that attracts more companies to compete for his customers; that spending effort on innovation quickly drains his resources and that too much choice is paralysing his marketing.
Feeling radical, I suggested he should compete from strength rather than weakness and that many small firms are successful in the global and local markets:
1. Being closer to customers
Proprietors of small businesses often meet their customers personally and talk with them regularly. Decision makers in large firms are rarely exposed to their market, so they miss many opportunities and struggle to be customer-centred.
2. Responding with operational changes
Small businesses do not carry the overheads of their larger counterparts. Having less investment in "the way we do things here", they can quickly introduce new supplies, new machinery and new approaches to exploit profitable opportunities in the market. Rapid development takes months to introduce in a larger company.
3. Trading fanatically
I love working with owners who are obsessed with their business and sales: they continually improve their service, new developments and products. Few employees in big firms lie awake at nights fretting about customers: I know many entrepreneurs who do.
4. Flexing the business
Most small companies have informal business plans. When they see an opportunity they want to pursue, they can turn orders around fast, they can try several ideas at once, and they can adapt to market or customer needs almost at will. For corporates, many opportunities become mired down in committees and task forces so 'fast response' becomes a meaningless phrase.
Competing on quality and service
I believe small firms can use their individuality to satisfy their customers on service, convenience and response. Even though small firms rarely beat larger competitors on price, they regularly beat them on delivery and quality. Indeed, many conglomerates have departments and working committees to study their smaller competitors closely but they are continually frustrated as they fail to copy their competitive strengths.
Adrian Pepper coaches people through business and personal difficulties, helping companies figure out what to do, how to move forward and what to get organised. You can contact him through Help4You Ltd, through his website at http://www.help4you.ltd.uk or by phone +44-7773-380133. At http://feeds.feedburner.com/help4you, you can listen to his podcast for small businesses. |  |
