It can be a daunting task to find a way to achieve growth when a larger competitor is dominating your market. It feels like anything you can do, they can do bigger and better. They have all the financing they need, while you struggle to raise investment funding and meet your cash flow needs. Plus they already have all the big customers on their books.
Given these difficulties, how do you make inroads in a market that someone else is already dominating?
There are ways, and it’s all about using your flexibility and dynamism as a newcomer and exploiting your opponent’s cumbersome size and lack of momentum. Never has a David and Goliath metaphor been more apt.
The key thing is, don’t be put off or daunted by a market that contains bigger firms: all lucrative markets will already have incumbents, but there are many examples of start-ups and small firms that have taken on the giants and won.
1. Find Your Strengths and Level the Playing Field
In the story of David and Goliath, it’s important to recognise that Goliath lacked vision. Though physically stronger, he lacked the foresight to anticipate future weaknesses. Your competitors might be the same.
While Goliath came to battle with a large club and a sword, David realised that in order to be successful he needed to play to his strengths and Goliath’s weaknesses, so he brought a slingshot and rocks.
Find your strengths and use them in ways your competition can’t. Take notice of their habits and product issues. Are they slow to update? Are there clear risks to using their product? Don’t mimic them, analyse your strengths and build based off of their mistakes.
2. Listen Carefully to Customers
Businesses buy from the biggest brand in the market because it’s a safe bet, but they often aren’t entirely satisfied. Indeed, big businesses tend to get complacent when things are too easy, so their products usually have flaws. Find them by speaking to customers and then offer them something better.
This can be a real game-changer. Take the example of Google Docs: Historically, Microsoft Word had been the industry standard for word processors. It had few competitors and even fewer issues with the software, but when Google introduced a collaborative editing function, a solution that saved companies huge amounts of time on cooperative projects, companies began flocking to Docs.
While Google’s product was similar to Microsoft’s, a single feature was enough to shift the market. Cloud-based productivity software was a solution to a major problem, although one that was seldom articulated.
That is the kind of innovation that you can bring to an area occupied by an industry giant. When you show them the improvement that you can bring, customers will see the benefit and most importantly its not always only about the cost and being cheaper. Cheaper isn’t always better.
3. Offer a More Personal Service
In general, SMEs prefer to work with other SMEs in their B2B dealings. This is because they are wary of the power imbalance when they are buying from, or selling to far larger companies. Large corporations also generally lack the personal touch.
If you can build real relationships with your clients and maintain them by showing that you can be flexible to their needs and circumstances, you can make inroads into the market and build far stronger brand loyalty than your bigger competitors can even dream of. One way you can do this is by speeding up the cash flow along your supply chain, while still offering your clients better payment terms than the big guys do.
Using Supply Chain Funding or domestic Trade Finance, SMEs can ensure they maximise the discounts offered by their suppliers by being able to pay “cash on delivery”, whilst still giving customers their normal trading terms to pay their invoices. This coupled with Invoice Finance ensures that significant funds are available for investment in the business and its operations which help to pay for the new and bigger orders, that you will invariably win off your Goliath. At the same time, you can be a model client to your suppliers, paying early in exchange for preferred terms and further establishing your business as a leader in its niche.
By investing, innovating and growing your business network, you can take on the giants and win.
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