– add more unique value to the products
– cut cost (solve cost structure)
How to solve quality solutions is not a big focus for the market
As you already see before, there are 2 main strategies to solve the price war:
1. Fight back
2. Escape from it
Fight back means that you are still in the same market, and compete back with your hundreds of competitors.
While “escape from it” it means more for finding a new target market/new products that can separate you from the competition.
If we find a new target market, we can do more specifically by choosing the market that only sells BBQ or shisha. What if the niche market is still have a high competitive? Then the best way to do it is to specify it again or fight back.
You can specify it again to more like “sell charcoal briquettes BBQ for restaurants” or “sell charcoal briquettes BBQ to reseller only” and it can give you a less competitor
Maybe, we have a pop-up in our mind and think “Yes, but does the more specific market mean that we will have a less customers? Well yes, you will get more customers compared to selling your briquettes to all of the market needs (BBQ, Shisha, and more). But also do not forget that you will get fewer competitors.
If you have any thoughts or objections about niching your market, let me ask you this.
“OK, maybe you will get fewer customers, but do you already have a bunch of repeat customers when you sell your products to the wide market?
“Are you just have a few and still get minus because your competitors ate you?”
“Or even you have zero?”
If you have a few customers or zero, then why thinking about a specific market is not profitable?
If you have 10 customers when you sell your briquettes to the wide markets, but then the potential customer in your niche market is also 10, then it means 10 equals 10
10 customers (wide market) = 10 customers (niche market)
But again, the best to grow your business is by winning the small market first, and then you can scale up because you already have power in your small market niche.
If you have 10 customers in your wide market, but you also have 10 customers in
your niche market, maybe it sounds the same, but it’s not.
When you win the niche market, you already have a reputation compared to your fight against a big dozens of competitors because you will not be seen.
So, the truth is, that 10 customer wide market is less valuable than 10 customers in niche market.
In terms of reputation 10 customers (wide market) < 10 customers (niche market)
And that’s not it, what if your market niche has more potential customers than 10? What if your potential customer is 50 or even 100?
10 customers (wide market) << 50 customers (niche market)
Okay, maybe you already got the point here, and as a reminder, all of your business decision is made by you and your team.
There are still other cases, what if you already have a bunch of customers in your wide market? What is the best? Fight back or escape from it?
Okay, let me ask you a question, “If you have already a bunch of repeat customers, do you have the power to expand your brand?”
If the answer is yes, then you can fight back the competition. By expanding your business and your brands.
If the answer is no, then fight back is still
not worth it, because maybe you can compete in a while, but in the long term, your business may stagnate and your cash flow is low. This is a big hole, and your competitors can crush you.
So the best way is to find a new niche market and win it there. This competition is more like a tree, a small tree cannot compete with lots of giant trees, so the best way is for the tree to focus on itself until it grows and gets bigger step by step. When it is bigger, they can compete in lots of aspects such as fruit taste, solid wood, and more.
Maybe you already agree with this, but you still ask “OK that sounds make sense, but when I find a new target market, does it mean I have to lose my previous customers?”
To be honest, this can be a tough problem to solve. Maybe you can see the niche market potential first, and then you can pivot your business slowly so your previous customer does not leave you behind.
And when you already have a stable fund/cash flow that you targeted. Also you already have a new repeat customer in your niche market, you can change your target business directly. So you can lower your risk and have a stable business pivot.
