Tmi Essay
START-UP BUSINESS STRATEGY
Even small firms with a single business and only a few related product offerings or start-ups with a single product must decide how they will compete. And just like an SBU in a major corporation such as 3M, their competitive strategies should be tailored to their unique resources and competencies and aimed at securing a sustainable advantage over existing or potential competitors. Therefore, the same set of generic competitive strategies are just as appropriate for small firms as for business units within larger ones. For example, Belvedere vodka—made by a small distillery in Poland—has captured a substantial share of the prestige segment of the North American vodka market by stressing the five-century tradition of its production process and the superior quality of its imported product: in other words, by pursuing a very effective differentiated defender strategy.
However, there is one important difference between single-business and multi-SBU organizations. In smaller single-business firms the distinction between business-level competitive strategy and marketing strategy tends to blur and the two strategies blend into one. Belvedere’s competitive strategy, for instance, is essentially the same as the market positioning for its primary product: a product that offers higher quality than competing brands because it is made with old-fashioned methods and ingredients that have not changed for centuries. And the elements of its marketing strategy all flow from that competitive/ market positioning: a premium price, advertising that stresses the product’s long history and old-fashioned production practices, traditional packaging, and the like.
Another difference applies to entrepreneurial start-ups. Most start-ups do not have the resources to succeed by competing as a “me-too” competitor in a well-established and highly competitive product-market. By definition they do not have an established market position to defend. Therefore, while
Even small firms with a single business and only a few related product offerings or start-ups with a single product must decide how they will compete. And just like an SBU in a major corporation such as 3M, their competitive strategies should be tailored to their unique resources and competencies and aimed at securing a sustainable advantage over existing or potential competitors. Therefore, the same set of generic competitive strategies are just as appropriate for small firms as for business units within larger ones. For example, Belvedere vodka—made by a small distillery in Poland—has captured a substantial share of the prestige segment of the North American vodka market by stressing the five-century tradition of its production process and the superior quality of its imported product: in other words, by pursuing a very effective differentiated defender strategy.
However, there is one important difference between single-business and multi-SBU organizations. In smaller single-business firms the distinction between business-level competitive strategy and marketing strategy tends to blur and the two strategies blend into one. Belvedere’s competitive strategy, for instance, is essentially the same as the market positioning for its primary product: a product that offers higher quality than competing brands because it is made with old-fashioned methods and ingredients that have not changed for centuries. And the elements of its marketing strategy all flow from that competitive/ market positioning: a premium price, advertising that stresses the product’s long history and old-fashioned production practices, traditional packaging, and the like.
Another difference applies to entrepreneurial start-ups. Most start-ups do not have the resources to succeed by competing as a “me-too” competitor in a well-established and highly competitive product-market. By definition they do not have an established market position to defend. Therefore, while