If you are concerned with maintaining your competitive advantage, or simply staying alive like the rest of us, you most likely have considered alternative sources of revenue in the last eighteen to twenty four months. You might be a one person outfit selling a better mousetrap, or a Fortune 500 executive launching a new division to rev up growth. Discovering new markets must be part of your overall growth strategy.
Whatever the case, at some point you’ll need to go back to basic- thinking like an entrepreneur — whether it’s to launch a new product or service line, extend to a new market segment, or establish a beachhead in a new geographical territory.
The reality, as every entrepreneur knows, is that most markets already have existing competitors. Even the largest companies in the world sometimes find themselves the small fish in a big, new pond. And the bigger fish already know the territory; they have the scale, connections, and market share to make life difficult for newcomers.
Still, there are tried-and-true ways to swim with the sharks, and start and grow a business. What I will share with you, and what other readers have provided, are not only classic cases of market penetration, but some unconventional ways and some examples of how to leverage the tools that avail themselves to you.
There are three steps to effectively entering a new market in spite of what players are on the scene:
1. Don’t buy into swinging for the fences, try for singles and doubles:
Big companies are accustomed to hitting home runs every time they step up to the plate. They generally do not venture anywhere unless they know for certain the ROI is in place and waiting. For they have the research, the channel partners, and the consultants. What they lack as a result of their size are flexibility to change courses quickly and efficiently, flexibility to work with customers on specific needs, and the quickness necessary to meet deadlines.
As a new player, you may not have the resources some of the BIG BOYS have in place. Do not despair. There is a clear advantage to being small, cross functional, and flexible. You can create pilot teams throughout your company, each composed of people from all the departments. Their mission: Getting a revenue project up and running in a ninety days. That is what I call “small ball” strategy, to use one of Baseball’s favorite terminologies.
90 days? I can sense some skepticism as you are reading this.
What you need to keep in mind is the purpose of the 90 day goal-line: The 90 days forces everyone in the team to confront issues that would keep you from succeeding. The clear focus and short time frame force team members from different departments to break down the walls that literally and figuratively keep them separate.
On a personal note, I always try to enlist the help of at least one stake holder from the customer side. If that is not possible, make sure the customer’s wishes are well represented through the sales representative.
2. Be creative with execution.
There is so much to cover in this section. I want to instead focus on small organizations with scarce resources and smaller budgets.
You probably remember the case of how Red Bull decided to compete. They did not go after the soft drink market and compete head to head with the giants of that industry. They instead went after the college and athletics crowds, and distinguished themselves as an energy drink. As they established their name brand, customers, like liquor stores and super markets came calling. The rest of the story is well known to all. My point is, you need to know your competitors. You need to know your market, or a segment of it. Taking the road less traveled is often times the safer way to go.
On a recent trip, I came across a customer that was hesitant to pull the trigger on a solution that was certain to help his organization. He was reluctant due to timing, budgets, and all the reasons you are all too familiar with. I offered we customize a solution for him, provide him a sampling of our offering at no charge to his company. I needed to validate to him and his shareholders the benefits. Our down side was insignificant vise a vise the trust I needed to create. I am certain that if he does not go forward with it, it will not be because he failed to see the benefits our solution will offer his company.
3. Change your moneymaking approach to be different from the market leaders.
By not playing in the same soda markets as Coke and Pepsi, Red Bull didn’t have to compete on price, where it probably couldn’t have won.
By working with our prospects on finding unique solutions for their needs and offering proof of concepts, and even providing the hardware they need to “play with”, we have essentially increased our chances of landing future contracts exponentially.
The Game has just began
If the good news is that you’ve successfully entered or created a market, the bad news is that you’d better be ready for a competitive reaction. If you’ve been successful, you’ll almost certainly wake the sleeping giants and draw in newcomers.
Be prepared to fight
There may be times in which a new entrant’s growth stalls even though it does everything right. Innovating, moving quickly, and offering something unique — be it customer service, technology, value, brand association, or a different mix of attributes — should give the entrepreneur a good start.
But giants have a lot of power in their scope (i.e., bundling different products and services together), brands, relationships, and customer bases. Think of Microsoft’s successful battle with Netscape over the web browser market. Clearly, not every big company is slow or can’t innovate. Some are very good at figuring out new market segments and can shift huge amounts of resources — both capital and great talent — to defend whatever turf is under attack.
Not all big companies are afraid to take risks, either; indeed, because of their size and resources, they can afford to take them. GE, for example, brings those advantages to almost every market in which it competes.