Beating Goliath

It was the Israelites versus the Philistines in the book of 1 Samuel in the Bible. The Philistines had a not-so-secret weapon, a ten foot tall armored giant named Goliath.

Goliath spent his days challenging a champion of the Israelites to a winner-take-all match. The Israelites, for their part, spent their days hoping someone else would go up against the giant, or God would intervene and they could all go home to their wives and their flocks.

David, Jesse’s youngest son, was going back and forth from home in Bethlehem where he cared for the family’s flocks to the battle ground to bring supplies to his brothers. It was on one of those visits that he saw Goliath and found out what the king was promising anyone who could defeat Goliath. David decided he was just the fellow for the job.

Instead of wearing armor and carrying a sword, David took his shepherd’s bag, sling and some stones. He used his sling to rocket one of the stones into the center of Goliath’s forehead, killing him.

That’s an inspiring story, especially if you have a David-sized business. We live in a world of ever-larger giant businesses and we need to find ways to win against that giant competition.

Things We Know for Sure
We know that Goliath businesses get beat every day. Right now, as you’re reading this, there are smaller businesses that are thriving and profitable in the face of giant competition. There’s no reason you can’t be David.

We know there is one sure way to lose to Goliath. All you have to do is compete on Goliath’s terms. Try to beat the giant on price or amount of advertising or breadth of selection and the giant will stomp you into powder.

We know what it takes to build long term profitability. Profitability comes from delivering perceived value in your target market. Goliath can deliver price value, but there are lots of other kinds of value.

We also know what it takes to build long term competitive advantage. If the foundation of your competitive advantage is anything you can buy, like technology or massive inventory or an advertising campaign and someone will copy it. But if you build your competitive advantage on the rocks of relationships and culture, your competitive advantage comes from something no one else can copy.

Four Basic Strategies
There are four basic strategies that work when you go up against giant competition. Here they are:

Strength against Weakness
Profit from Goliath’s Strengths
Choose the Ground
Strength in Numbers
David used only one of them. You have the choice among four, based on what you already do well. Let’s review them all.

Strength against Weakness
This is the strategy that David used and it’s the core strategy for everyone who beats Goliath. Goliath was big and tall and strong. Goliath had formidable armor. Those were his strengths and to most of the Israelites they must have looked pretty unbeatable.

But David knew his strengths. He’d gone up against lions and bears. He knew that he had a sling and he know how to use it.

He took that strength and went for Goliath’s one point of weakness, the one spot that wasn’t armored. His well aimed stone when right to Goliath’s forehead.

What about you? What are you good at? Do you have a reputation for service? Do you specialize? Figure out what you’re good at and see if you can position it against a weakness in your giant competition.

Not all giants are the same, but most of them have similar weaknesses that you can attack. Most giants are not very light on their feet. They can’t move quickly. You can. Use that to your advantage.

Most giants are also part of even more giant corporations. Those corporations control many aspects of their business from some distant headquarters. Advertising programs and sometimes even inventory control come from headquarters and aren’t subject to change. Their knowledge of the local market is based on statistics.

So, try positioning your flexibility and first-hand knowledge of the local market against Goliath’s weakness. Find out what folks don’t like about Goliath, promote your difference. Look for advantages you can gain from speed and flexibility and you can be David.

Profit from Goliath’s Strengths
Some smaller businesses have found that a giant competitor can actually help them. After all, the giant’s advertising tells folks about products that you also sell. After all they can draw folks to your part of town. What can you do with that?

This is a kind of judo strategy. You use your competitions strength and momentum to help build your business.

In many industries as successful judo strategy is to sell complementary products. Sell something that the works with what the giant sells. Put together packages. Set up service and product bundles that the giant can’t match. Use a little judo on Goliath and you can be David.

Choose the Ground
Every major writer on military strategy has advised that you pick the ground for a confrontation. In business, we call that choosing a niche.

Niche strategies are among the most profitable in business. Remember that we said that long term profitability comes from perceived value in the target market. Well, one thing you control is how you define your target market.

Your target market can be geographical. It can be a type of customer, like schools or high rise office buildings, or manufacturing plants or BSCs. You target market can be based on a particular product or service or combination bundle.

Product/service bundles are excellent ways for distributors to choose the ground. If you develop bundles for specific niches, those can be developed to deliver the perceived value that builds long term profitability. Combine that strategy with a concentration on high-value customers and you’ve got a recipe for long term success. That’s another way you can be David.

Strength in Numbers
David was only one man, but often it’s a group that joins together to fight the giant. There are three basic ways that can happen.

Consider joining a cooperative or buying group. If you already belong to one, help structure specific strategies to help you beat the giants. You may not be able to match the deals Goliath gets on inventory or advertising, but you should be able to use the group to improve your profitability and as a source of competitive ideas.

Sometimes several smaller businesses band together to reduce costs or increase efficiency without any kind of formal agreement. Often these are not similar businesses.

Can you hook up with other businesses that all need deliveries in a particular part of town and go in together on a delivery service? Can you get emergency inventory back-up from a wholesaler or from a non-competing distributor?

Goliath businesses often have a significant impact on the local economy. Not everyone thinks that impact is positive. Join together with other local businesses to take action to keep Goliath out of your territory in the first place. Putting several Davids together is a good way to beat Goliath, too.

The Israelites got nervous when Goliath showed up on the battlefield. It’s scary when Goliath shows up in your market, too. In the Bible, it was little David who beat Goliath.

In business you can pit your strength against Goliath’s weakness. You can profit from Goliath’s strengths. You can dominate your niche. And you can get together with other Davids to beat Goliath.

Goliaths get beat every day. There’s no reason you can’t be David.

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