Following in the footsteps of giants is a risky business. But with a little bit of nous, smaller suppliers can learn to not just survive but thrive.
Here’s OC&C Strategy Consultants’ guide to avoiding getting trampled.
1) Choose the right weapons
Winning on every dimension is not necessary. David didn’t use armour. He had a sling. It’s a similar story for Tyrrells. Quirky brand personality combined with speed and agility is the weapon of choice for the posh crisp producer. And the giants are struggling to compete.
2) Exploit areas of weakness
All giants have chinks in their armour. For many brands the weakness can be price, pushed high by massive marketing budgets. Challengers need to make sure they understand the economics of their competitors and what guides (or restricts) their behaviour.
3) Pick the perfect moment
Timing is everything. Just ask Innocent. First the supplier picked a lethal weapon (fresh smoothies; unique at the time), then it rode the zeitgeist all the way to the bank, cashing in on growing demand for healthy products and piggybacking on the government’s high profile 5-a-day campaign. They also judged the economic mood perfectly shoppers were prepared to pay a premium for their smoothies back then. Now, as a giant in its own right, times are tougher.
4) Balance risk with reward
Food and drink is a tightrope. Getting the balance between risk and rewards is key. Risks should only be taken if there is a sufficiently attractive and defensible prize at the end. Getting it wrong can hurt, as New Covent Garden found to its cost when it ditched its foray into ready meals six months after launch in 2009.
5) Make some powerful friends
Having big friends goes a long way. That means palling up with the retailers if you’re a new brand on the block. Dormen Food Co is a case in point: by being the first to develop clip strips for its nuts and snacks, the supplier scored points by effectively adding extra retail space on to the shop floor. The tactic was particularly successful in forecourts and c-stores.