In business, small operators have many strategic shortcomings compared to their larger counterparts – no matter the industry. But just as the storied weaklings who defeat the giants, bullies, dragons, tyrants or other more powerful foe – smaller enterprises can win by studying and attacking weak points of their better fortified competitors.

Most are already aware of the myriad advantages of being “big:” more leverage to negotiate price with suppliers; better buying power; stronger “armies” of attorneys, accountants and other professionals to beat back competitive threats, and many more.

Smaller operators, on the other hand, usually don’t have the negotiating power with suppliers or similarly fortified armies of professionals to beat back competitive threats. Their lean operations also usually mean more time and effort required from the owner to keep things afloat. Among other disadvantages, this positioning leaves small operators more vulnerable to economic downturns.

At the end of the day, all the advantages of the “bigs” – and the disadvantages of the “smalls” – mean either passing on price savings – or increases – to customers or end-users.

But what if smaller counterparts didn’t have to compete on price?  The larger and better armed players have competitive soft spots that can be exploited. The following are 5 areas where we believe larger competitors often fall short or choose not to invest in.

  1. Quality
  2. Brand experience
  3. Customer service
  4. Operating efficiencies
  5. Innovation

How can a smaller enterprise exploit the 5 “soft spots”?

We’ll take each area one at a time.

Quality – Be the one that is positioned to offer better or premium ingredients, talent, advice, etc. that customers are willing to pay for.

Brand Experience – Discover and invest more time and resources into what differentiates your product or service brand experience from the stronger competitor, and reflect these in all aspects of marketing. Also, make certain that your messages are going to a target market segment that is particularly interested in the values you communicate and present when they interact with your brand.

Customer service – Like the brand experience, give customers an unforgettable user experience that they just can’t get from a competitor that does not invest in (or neglects) customer service. An upfront AND continuing investment in customer service in line with customers’ preferences is sure to yield a return of loyalty and repeat business

Find efficiencies – Allow space for employee contributions and suggestions for operational improvements. Benefits include discovering ways to reduce costs (that can be passed on to customers), reduced turnover, and staff with greater engagement and understanding of the company’s products and services. By the way, an added benefit may be staff more inclined to be ambassadors for the company or brand!

Innovation – Similar to finding efficiencies, allow staff to come up with new products or services that customers demand. Caveat: some cursory consumer research will be needed to drive such innovation, but it shouldn’t be a back-breaker to ask customers about the products or services they want, and what motivates them to purchase. All innovation is not technological, simplicity can add value as well.

Recognize a part of the market will always buy on price. The challenge is to identify the portion of the market for whom the above values before and after the sale are important, and then adjust the operation (including cultivation of staff) to deliver value.

The immense burden of time and resources needed to “turn the ship,” so to speak, in another direction may prove a deterrent to the larger operators. Smaller counterparts, however, have the flexibility to pivot and come back if the turn didn’t pan out.

When competing against a much more formidable foe, the lesser-healed opponent usually wins by making the shots that the large competitor can’t or is unwilling to make.

When this victory happens, usually one common denominator is at play: the “winner” hit a soft target.