faculty speak

Myth 5: SMEs cannot fight against big competitors

If you were to challenge Mike Tyson?
… Go ahead!
Challenge him for a game of chess.

On a beautiful day in October 1997, India woke up to a very catchy jingle, “Aaya naya Ujala. Char boondo wala. Ha ha!” No one, at that time, thought that history was being created. In a very short time from that day, it went on to become a national rage- first the jingle and then the brand itself. This rage shook one half-a-century old brand – Robin Blue – so vehemently that it almost got killed. (Today, Robin Blue does not find even a mention on the company’s website). The challenger- Ujala was owned by Jyothi laboratories (it still is) which was far smaller a company at that time compared to Reckitt Benckiser, the owners of brand Robin Blue. But that did not deter Jyothi from challenging a mighty competitor and prevent the history from being written.

The lesson to be learnt from this episode is- success in the market place is not about the size alone. A small challenger can successfully uproot a much mightier competitor provided he plays on his strengths and exploits the competitor’s weaknesses. Ujala succeeded in toppling Robin Blue because it exploited Robin Blue’s weakness (of leaving behind blue stains on the clothes) and played on its strength (of being a liquid whitener). Jyothi Laboratories did a great job on marketing front. It developed a better product than RB; priced it aggressively; distributed it well throughout the country and promoted it very impact-fully.

If you look around, there are a good number of examples worldwide to substantiate this phenomenon. Think of Apple vs IBM in the 70s and 80s. While IBM was a behemoth, Apple was a tiny entity. Yet the history was made- while Apple went on to become the most valued company in computer hardware, IBM changed its track from being a hardware company to a software company.

A closer look at all such examples reveal that the challenger identified its own strengths as well as the competitor’s weaknesses appropriately, and hit the competitor where it hurt the most.

This brings us to a far more important issue of ‘How to identify these strengths and weaknesses of oneself as well as that of the competitor?’

The answer to this lies in deep knowledge of marketing. A marketing centric organization will always be watchful of its own strengths and weaknesses as well as those of its competitors. It will also be mindful of the opportunities and threats in its surroundings. After all that’s the fundamental function of marketing. 

Going by a simple logic, there is no point in challenging Mike Tyson for a bout of boxing. That’s certain death for a lesser soul. That’s the area of his strength where he is among the best. To win him in his area of strength may not only be impossible but also fatal to the challenger. However, winning him in chess can be a cake walk. That may be your strong area and his weakness.

Many a times, new entrants take the competitors head-on. Now, this is a very risky proposition. Even if your product is better than the competitor’s, to succeed against an established competitor, you will have to outwit him in every department- that is promotion, distribution, dealer margins, etc. This may prove very costly, and hence may not be suitable for SMEs.  SMEs by their very characteristics have an inherent advantage and that is their small size. You will wonder what I am talking about. Because whenever a reference is made to the size, it is understood to be ‘big size’. And here I am, referring to small size of the organization being an advantage. Yes! Small size also has some inherent advantages as opposed to the big size, when it comes to enterprises. For one, small size organizations can be more flexible to adapt to the changing needs of customers. Another advantage of small size organizations could be their willingness to break away from the norms and experiment. However, all businesses in SMEs need to clearly define their own advantages (and strengths) and be confident and comfortable with them.

To succeed in today’s marketplace, cluttered with competition, you need to know your stuff well and present it equally well to your customers. That is where the key to success lies. No matter how saturated the market place is, there is always enough room for a new entrant who has something better to offer. Think of the mobile handset market. In the last 10-12 years this industry has seen entry (as well as exit) of several players– Spice, Karbonn, Lava, Xiaomi, Oppo, Vivo, etc. Some of them made it reasonably big for themselves. Moreover, the leadership of the industry has changed hands from Nokia to Samsung to Xiaomi.

Many people think that entering into a saturated market is a costly affair. You may be right, if you deploy conventional marketing strategies, where you will be forced to outdo your competition in every aspect of the business, which will eventually add up to your costs. However, real marketing is not about outdoing competition by spending more than them in your marketing activities. In case someone is doing this, he has not understood marketing in its true sense. A true strategic marketing is about outdoing the competition in terms of winning customers at least possible costs. In order to achieve this, a lot of innovations need to be done on all fronts of the business. On marketing front, you have to be better than the competition on Product, Place, Price as well as Promotion.

Though, I have tackled this issue at length in some of my earlier articles in this series, I would like to deal with this subject little more in the context of Ujala. What Jyothi Laboratories did essentially was- developed a better Product than the ones available at that time in the market. While doing this they took into account the consumers’ problems with the current offerings. Once a better product was developed, they went on to establish a robust distribution channel (that’s Place strategy) to ensure uninterrupted supply of the product to as many targeted consumers as possible. They also Priced their offering appropriately to ensure a high ‘value for money’ for the consumer. And they went hammer-and-tongs in Promoting it across the nation.

Success is a science;
if you have the conditions, you get the results.
– Oscar Wilde   

Prof Rajeev Kamble
Associate Professor