Sunday, August 3, 2008

How to handle a powerful competitor? – Introspective questions for small business?

Handling a powerful competitor is always a challenge for small business. Recently with the retail revolution, many Mom-pop shops that run with the small business structure are facing the pain. Added, to it, is the crude inflation control mechanism by Y.V.Reddy, the RBI Governor. The hike for two times in CRR rate, in the single month of July’08, is going to have desperate effect in small business, as small business is a sector which borrows significant amount from banks to run their business. In this context, having proper competitive plan, for powerful competitors, is important.

Following are the introspective questions of handling powerful competitors

1. Understand the powerful Competitor strategy. Are they ambushing? Are they aggressive? Alternatively, are they playing defensive?
2. What kind of alliances they have? Are they trustworthy to the powerful competitor
3. Can networking efforts be build to these alliances?
4. Could there be any alliances with the powerful competitor itself which can protect both of the parties interest. Recently big retail outlets are arranging space for local Mom-pop shops on the ‘left out’ product categories

This introspection could help to build a basic competitive strategy to handle powerful competitor.

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