How to Profit When Dealing With Tough Competition
“If you are able to identify the enemy and yourself, you don’t need to fear the outcome of a hundred wars.”
This quote is from Sun Tzu, a Chinese military genius who lived over 2,000 years ago.
People get upset about competition. People will complain about unfair pricing or marketing tactics, as well as whether their prices are too high for poor quality.
They are astonished that people still buy from their company.
They aren’t asking the right questions or looking at the situation through the client’s eyes.
Why is the incumbent loyal to his customers
Because customers still value them, even when they have complaints. This could be due to the fact that the competitor has been on the market for a long time and is very large.
Familiarity is a source of comfort and will often accept substandard products or services at high prices.
IBM boasted that they never fired anyone for purchasing their computers. You’ll save yourself from being foolish in front of your colleagues, as opposed to the guy who bought their computer from the new “kid on the block” and got a terrible deal.
It can be very costly to confront a competitor directly. Small businesses often don’t have the resources to pay for this.
It is often more practical to circle around them.
Let’s take the burger restaurant industry as an example. McDonald’s is the market leader and a formidable competitor. They don’t cover the whole market. This would be a negative for their brand and market position.
McDonald’s has seen a significant increase in the burger market. Markets become less mature as they grow. This is often the place where there are the most significant opportunities.
Big Macs are not for all burgers.
Many people want gourmet burgers and super-sized burgers. Catering for these customers is a way to appeal to a different type of customer. They are looking for something other than a Big Mac.
These people are familiar with most markets.
Notably, the burger vendors catering to these different tastes are not competing with McDonald’s because of its unlimited resources and low prices.
It’s not enough to analyze the competition closely to determine why they are successful or how to beat them, but also to uncover the niches they will and often cannot satisfy.
This might require a new product or service. However, it will still need a unique market positioning and selling proposition. You need to be recognized for something other than the 800-pound gorilla in your area, but it is still valuable enough to make your business viable.
You can attract more people by making your offer low-risk and convincing your buyers to show their intelligence in front of colleagues, friends, and even rivals.
Sun Tzu also reminds us of another important fact: Victorious warriors win first, then go to war. Wounded warriors go first to war and then try to win.
Thank you for reading.