I’m currently progressing through an MBA program at the Jack Welch Management Institute. In the current module, we are in a discussion about business leadership, and a classmate brought up the challenges that large multi-national companies pose to small businesses. With the purchasing power, marketing, and legal resources, how can a small company compete? How could a small wireless carrier possibly compete with AT&T, Verizon, and Sprint. How can the mom & pop farm equipment supplier possibly compete with Caterpillar. I think the answer is to define the battlefield. Do you choose to compete on the big company’s battle field or yours?
In Sun Tzu’s The Art of War, the author writes that if you use your army in battle, you may lose it. Greater power comes from demonstrating the army’s power without having to meet in battle head on.
I think it’s the same in business. Competing head-to-head with a big company requires choosing a battle field. The battle field has characteristics that are favorable to one army and not favorable to the other. If the smaller company/army can find a different battlefield with more favorable conditions, the smaller army can cause the larger army to retreat or just not show up.
I think there are plenty of market segments not being served by big companies. Large companies tend to focus on volume of some kind. To focus on volume, you have to neglect complexity to some extend and standardize an offering. This leave a gap where customers needing a customized solution are underserved. I see this as a big potential battleground for small companies dealing locally.
I would appreciate any comments.