Just because a rival business is a large organisation does necessarily not mean that all attempts to compete in the industry are hopeless if you are just starting out. Just like the “David an Goliath” story in the Bible, you just need some faith and the right tools to take down the giant. Whereas David used a pebble to defeat Goliath, if you are a small business, you just need a proper strategy to compete effectively.
Below is a list of four ways small businesses can have a competitive advantage against their larger competitors.
1. Customer Focus
Businesses of any size can be successful if they understand their customers needs in a closer manner. If managed properly, small businesses are able to serve their customers directly and effectively without struggling through bureaucratic layers of large corporate, or company policies which restrict employees.
2. Quality performance in service delivery
Small business owners can insist on higher levels of quality where a corporate CEO has to push a quality philosophy through layers of bureaucracy. At the end of the day, what is planned at top management is not exactly what is implemented at the lower level or by general workers.
Also, since we are living in times of constant change, most large corporations are slow to respond to changes in the market environment compared to smaller businesses, and therefore small businesses are able to quickly respond to changes in customer’s tastes and preferences.
Entrepreneurs can compete with companies of any size through the use of innovation. Many entrepreneurs are innovators looking to satisfy customer needs in a different way.
An example of this would be Sizwe Nzima, 21, who runs Iyeza Express, an innovative enterprise which helps reduce overcrowding at public health facilities by collecting and delivering medication from public clinics and hospitals on bicycles to residents of the Western Cape (Cape Town, South Africa) who are on chronic medication. This small business has earned its owner a spot on the Forbes Magazine’s 30 under-30 Africa’s best young entrepreneurs list. In such as case, large companies would be more than worried about the fuel costs it would take to deliver the medication on a door to door basis.
4. Special Niche
If a small business were to engage in direct competition with a large corporation it would easily be crushed if seen to be a threat, especially if just starting out. Due to first mover advantages, larger companies have invested in the infrastructure which allows them to be able to engage in price wars, quality management, research and development, as well as any other marketing tactics which secure or improve their market share.
For a small business to thrive it would be more advisable to focus on a particular product, a specific group in a large market, or a certain geographical area, then become an authority in that particular niche, as opposed to directly going head to head with the big boys.