2011-09-01-OC_C-Size_isn_t_everything_8页_100kb

FMCG Competition Summary: David and Goliath Lessons

Introduction

The report draws from the biblical David and Goliath story to highlight that size isn't always an advantage in FMCG. It emphasizes lessons applicable to small brands (Davids) facing large competitors (Goliaths), stressing the need to neutralize opponents' strengths through strategic actions. Goliaths and chameleonesque companies can also learn, given rapid shifts in brand favor.

Key Strategies for Success

• Choose Weapons Carefully: Focus on core strengths to differentiate and neutralize Goliath's advantages, such as clear positioning baked into the business model (e.g., Lumene's Arctic ingredients leveraging). Avoid over-reliance on Goliath-like processes.
• Look for Areas of Weakness: Identify and exploit competitors' vulnerabilities, like Cristaline's multi-source strategy targeting major brands' cost issues to gain an economic edge.
• Choose Your Moment: Time your offensive to coincide with consumer trends or strategic shifts; attack when Goliaths are off-balance, as seen with Burts Bees capitalizing on the 'natural' trend.
• Balance Risk and Reward: Assess whether the end goal—such as owning a profitable niche or category leadership—is defensible and worth the risk, exemplified by Innocent's entry into fresh fruit drinks.
• Have God on Your Side: Build alliances with retailers or Goliath brands from other categories for support; for instance, Dormens solved retailer distribution issues to gain distribution, or R&R licensed brands to compete effectively.

Self-Assessment Questions

Consider these to evaluate your strategy:

1. Identify your role as David, Goliath, or both and inform your actions.
2. Determine your key weapons and their effectiveness.
3. Pinpoint your opponent's weaknesses and expected responses.
4. Decide if now is the right moment to attack, based on timing and opportunities.
5. Define your end game and how to rally allies.