What to do if a new competitor is going to enter your market?
The truth is that even aggressive retail entry strategies in themselves don’t normally disturb established medium sized or large markets dramatically in the first 5 years. Whatever the circumstances, it takes time to build enough stores, or to acquire enough regular e-commerce to make a significant difference to the status quo.
The exceptions are when a brand brings a revolutionary product, which is favoured by consumers very quickly, and the switch from brand A to the new brand B is immediate. Apple’s iPhone (2006) springs to mind or Crocs comfortable plastic shoes (2002) as examples.
However, following a successful market entry, it is normally too late for incumbents to get all share back, if existing players deploy a “wait and see” strategy.
Woolworth ignoring Aldi’s entry into Australia (2001), Eldorado sitting still whilst M-Video (2005) grabbed the dominant market share of consumer electronics in Russia, BIM (1995) grabbing Migros’s leading position in Turkey’s modern food retail market are all examples of waiting too long to react.
The secret of being ready for the fight is to put yourself in the market entry company’s shoes! Why are they coming to your market, what opportunity have they identified and how are they likely to grab it?
If you can understand this, then you can focus on not being the major donor of the market share. Bravado along the lines of “competition makes us stronger” is frankly a good sound bite, but very little else. Making your business hard to compete with will normally be a much better deterrent to either discouraging a competitor into coming to your market at all, or at least ensuring they try to avoid coming close to you.
If this situation is a reality in your market, contact us for a free discussion. We have solid experience from having acted for both sides of the equation, defender and aggressor!