Even if you’re in the market and making a profit, new competitors can disrupt your business at any time. Use these techniques to protect your business.
In a free market, anyone can open a business—and anyone can compete with your business. There is no law limiting the number of businesses within any given industry, except in a few rare cases. But why would you give up? Be a fighter, and hold tight to your market. Here are a few techniques to protect your market share from competitors (including our beloved copycats).
The Secret Recipe
Whether it’s a real secret recipe or a marketing stunt, the mere idea of holding a secret recipe means you possess and control an unmatchable product. If someone figured out the Coca-Cola recipe, for example, it would be extremely hard to convince people that it is exactly the same. In fact, Coca-Cola’s so-called secret recipe has changed a dozen times since it was first created 128 years ago. Nowadays, bottlers are allowed some freedom to substitute sugar with other ingredients, such as high-fructose corn syrup.
The bottom line is: create your own secret recipe, protect it… and most importantly, market it!
Relationships and Distribution Channels
A small energy drink company called Code Red recently outranked Red Bull in the Saudi market with no advertising budget. The secret was in the extra sales incentive given to distributors, guaranteeing product shelf placement at eye level while burying their competitors on lower shelves.
Don’t take relationships lightly when it comes to business. A good relationship with your supplier can protect you as an exclusive distributor, even if they see a better opportunity in one of your competitors. At the end of the day, business is built on trust; and trust can create a strong market-entry barrier.
“Don’t take relationships lightly when it comes to business.
Keep Your Know-How to Yourself
This is an ideal technique for the manufacturing industry. In the production of a new product, it’s easy to steal the whole know-how and enter the market by “stealing” a factory worker. One way to protect company knowledge is to assign one staff member to each stage of the process, and avoid shifting them around thereafter. A staff member will then be an expert in only one stage of the process, and clueless when assigned to any other stage than his or her own. If the product is a new invention, then of course it would be better to patent it.
Attack Yourself
Proctor and Gamble invented the best defensive strategy: attacking their own products. They launch and market products that compete with their own existing products, but targeted to slightly different markets—and they do it faster than their competitors. If the trend today is an organic laundry detergent, they launch one competing with Tide. Such a strategy is a big investment, but usually one that is backed up with huge potential profits.
Gillette is coming up with a new razor every couple of months. It is impossible for anyone to compete with them. The moment another company copies their product, they are three steps/improvements ahead of them.
Startups can use the same strategy, and employ existing resources and expertise through a new brand. Avoid complaining about clients shifting to new products. Since you were on the market before your competitors, you should foresee the change in trend, and adapt to it before they do.
“Any brand, however small, can establish a meaningful relationship with its consumers via the right message and consistency.
Strong Branding
When you walk around in a city you have never visited before, dying for a cup of coffee, you will easily spot a Starbucks once you’ve glimpsed their green logo from a distance—even before you spot the coffee shop right next to you.
Everyone loves Nutella (I think.) The recipe is not hard to copy, but people will still buy Nutella.
The iPhone brand is stronger and more established brand than Galaxy. It’s also more popular.
Brands hold promises that keep them competitive. You probably buy Panadol Extra instead of a generic painkiller that uses the same formula as Panadol because it promises you pain relief. Trust is a relationship that connects a consumer with a brand. Any brand, however small, can establish a meaningful relationship with its consumers via the right message and consistency.
P.S.
When you see a new business opportunity, think about how easy it is for others to buy into it. I’m not suggesting you shouldn’t take it; but stating this in your SWOT analysis can, at the very least, direct you to a counter-plan.
