Mike Brown: Competitive Strategy

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Recently, a full-time freelancer complained about a part-time freelancer, who also has a full-time job, using a strategy of undercutting the market with overly low-priced proposals for creative projects. She complained that part-time competitors’ pricing strategies were unfairly bringing down client perceptions of market prices.

In any business, competitors in related markets can enter “your” space as an add-on strategy to what they do. Since what you do isn’t a core market for them, they’re oftenoperating from different cost structures and commitments to the market. They may be quite willing to implement low-priced strategies to grab market share at the expense of traditional competitors.

Back in my corporate position in business-to-business transportation, we endured more than a decade of UPS and FedEx, much larger competitors in adjacent markets, serving a large, profitable portion of our market  through implementing new pricing strategies. Our company, tied down by various real and perceived roadblocks, never delivered a shot across the bow to let UPS and FedEx know they weren’t welcome in our market. Ironically, both competitors eventually entered the market using a more traditional strategy with some successes, but many challenges.

9 Strategy Ideas You Could Try

If part-time competitors are wreaking havoc in your market with low-priced products andservices, here are 9 strategy ideas to protect your overall competitive position and make it harder for them to compete:

1. Identify where you can be a part-time player, employing a strategy to disrupt that market and grow your business.

2. Dramatically change your processes and cost structure to compete at a lower price.

3. Since your core market is your full-time focus, compete through some combination of greater responsiveness, sharper focus, being smarter about what you do, offering betterquality, and/or providing better overall value.

4. Offer more options as a way to showcase your specialization.

5. Provide questions a potential customer should ask and get answered to ensure a low priced part-timer is a legitimate provider.

6. Offer an introductory promotional price in exchange for a longer-term commitment.

7. Develop other revenue streams which subsidize your primary market.

8. Buy and re-sell the part timer’s service to more price-sensitive customers.

9. Offer a satisfaction guarantee on the part-time competitor’s work. If a customer isn’t happy with the part-timers work, offer a discount to “fix” it.

What Are Your Strategy Ideas?

Are you facing low-priced, part-time competitors? What strategy ideas  are working or not working for you in dealing with them? - Mike Brown. 


Jim Woods is president and founder of InnoThink Group. We are one of the very few consulting firms specialized solely in helping organizations of all sizes in all industries increase their growth strategies through strategic innovation and hypercompetition. Email or call us at 719-649-4118 to speak at your event or devise an effective competitive advantage and innovation strategy for your organization.  Subscribe to our innovation and hypercompetition newsletter.   

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