Business Growth Strategies that Win Against Top Companies
I came across an article this week in the McKinsey Quarterly titled “When Companies Underestimate Low Cost Rivals”. The article discusses how market leaders end up losing marketshare to smaller companies. I thought this might be of interest to founders and or CEOs of early stage and expansion stage software companies looking for business growth strategies.
The article discusses several strategies that low cost rivals have successfully used to usurp the big guys. Strategies like:
- Competing in the undeveloped segments (or fringe) of the incumbent’s market while they build up capability
- Filling resource and capability gaps that the established players are ignoring
- And my favorite — The role of second order effects where a firm competing at the low end enhances their products and services to move up in the market space while maintaining a low cost base
As a an expansion stage focused Venture Capital firm that provides expansion capital to software companies looking for investors, we are always looking to help companies and their management teams in large markets competing against established players.
Companies which deploy and execute strategies like the ones listed above — with a low cost model with a capital efficient distribution model — are often the companies that win big and succeed with a company exit strategy that delivers above-average returns for the founders, CEOs and management teams.
Enjoy the article. Maybe it will give you some ideas on how to beat the big guys!
All the best!