For large companies, your competitive advantage lies in this...

This article mainly talks about how small and medium-sized enterprises and individual entrepreneurs can gain a foothold in the fiercely competitive market. It puts forward the view that they should not blindly pursue scale, but instead choose products that cannot be standardized, and use light assets and stability as advantages to form differentiated competition with large enterprises.

1. Don’t think big

Everyone is pursuing how to expand the business and expand the scale of the enterprise.

Many "experts" out there are also advocating for scaling up your company, encouraging you to mass-produce and standardize your products to make them bigger and stronger;

In fact, this is a very dangerous way of thinking for small and medium-sized enterprises.

Especially in the current environment, what we need to study is how to make the enterprise smaller and lighter, rather than making it bigger and stronger. This is wrong thinking.

For large enterprises, they want to grow bigger because their enterprises themselves are large enough and have enough employees, so they want to expand the scale. Even if they make a few dollars per item, or even if they don’t make any money, they are productive and each employee has output value.

Therefore, they need to study how to make the assembly line "move", how to expand the scale of production, and pursue large-scale development.

However, compared with small and micro enterprises, or even individual entrepreneurs, our competitive advantage does not lie in how big the company is or how powerful the project is. What we pursue is "winning with stability", "lightness" and "stability".

The word "light" here has two meanings:

One is to be relaxed. Make money easily and not too tired.

One is asset-light. The investment must not be too large. You should leverage the power of others where possible. Those who invest on a large scale at the beginning will eventually die miserably. I have seen many such cases myself.

And stability, of course, means stability.

2. Choose products that cannot be standardized

Since large enterprises are pursuing standardized and scaled products, we need to do the opposite.

Why choose "non-standard" products?

For large enterprises, they have a large number of employees and a complex internal structure, so everything they do must be streamlined, including production or product selection.

They are like giant crocodiles, large in size, inflexible, and slow to turn;

But once the projects can be standardized and streamlined, as long as they are straightened out, small businesses will have no chance. This is what the previous article mentioned as the "asymmetric competition."

This is the advantage and characteristic of large enterprises, but at the same time, it is also their weakness.

For individual entrepreneurs or small businesses, if they choose products that "cannot be standardized", compared to medium and large enterprises, they will not be able to streamline the project internally, and they will not be able to do it.

From this perspective, it is beneficial to small businesses or individual entrepreneurs, and it is also our biggest competitive advantage!

Here is a simple example:

When you go to a municipal hospital for medical treatment, you usually have to wait in line for 2 hours and see the doctor for 2 minutes.

Because doctors are facing too many patients at the same time, they just ask about the condition, look at the report, and then prescribe medicine directly without necessarily understanding the detailed cause of the disease.

For common diseases, there may be no problem, but because there are too many patients (clients) every day and the hospital is large, the process of seeing a doctor needs to be streamlined so that it can be better managed.

But for the same disease, if you go to a small hospital, the doctor will generally learn as much as possible from you, ask you some details of your symptoms, and then decide what medicine to prescribe.

If you find some retired old Chinese medicine practitioners, or private folk doctors, they will know the details and will give you some diet and conditioning suggestions based on your symptoms after prescribing the medicine.

In fact, for the same disease, each person has a different physique and lifestyle, so the prescriptions and treatment methods need to be changed. Doctors in small hospitals are better at this than those in large hospitals. Retired doctors or folk doctors will give you a more detailed and personalized (consumer) experience, haha…

And seeing a doctor is something that “cannot be standardized”;

However, in large hospitals, this series of actions must be streamlined and standardized for the convenience of management. Because of the large scale and large number of patients, standardized management is necessary.

Of course, whether it is a large hospital, a small hospital, or a private doctor, each has its own advantages and disadvantages. There is no good or bad. We need to choose and judge according to different situations.

If you think this example is too far away from you, Teacher Fox will give you a closer example.

From the perspective of e-commerce:

In 2010-2016, as long as you sold clothes on Taobao, whether it was men's or women's clothing, it was very simple. You could just take a photo and put it on the shelf and it would take off. Small sellers could sell a few hundred pieces a day.

However, things became increasingly difficult later on. Now, most of the clothing businesses back then have already transformed, and the rest are struggling.

Why?

Is it because market demand has decreased?

Or is it because of the bad market environment?

Neither.

This is because large companies and factories have seen the development momentum of e-commerce and have entered the market.

For them, they have money, people and goods. As long as they streamline the process, they can operate in batches and on a large scale, and ordinary merchants will have nothing to do.

The clothing industry has a huge market demand for them, and they found that this kind of e-commerce platform can also be operated in batches, which is nothing more than taking photos, putting on shelves, promoting, and testing styles...

Therefore, for them, as long as they standardize the production and sales processes, their competitive advantage will be huge.

After all, most of those engaged in e-commerce are small businesses and individual entrepreneurs. They are not competitive with large enterprises. As long as medium and large enterprises take action, they will be unable to fight back.

Therefore, those who survived in the clothing category were those who promptly transformed into niche, personalized customization, and clothing design...

Because, by choosing these non-standardized ways of playing, small businesses are actually very competitive compared to large companies.

In 2018, a man who used to be very good at selling dresses came to me to complain. He had been working in the women's clothing category for 6 years and said that he was under a lot of pressure recently. He hired 13 employees to help him. Although the turnover and sales volume seemed good, he was not making any money and even had to pay out every month.

My advice to him at the time was to change his positioning and start "OL dress customization". Later, he laid off most of his employees, leaving only 3 people to do this business, and then connected with a small workshop. Basically, the unit price of clothes is between 1,000 and 3,000. Even during the epidemic, he lived a very comfortable life...

This kind of customized business cannot be standardized for large enterprises, so they cannot do it. This is the advantage of small enterprises.

If he had not followed the direction I gave him at the time, the three years of the epidemic would have been difficult for him and he would have lost at least several million.

The reason is that I asked him to make the business “light”, and another reason is the special nature of customized business;

Because of the customized business, many customers are willing to wait, so even if the city was closed during the epidemic, customers were willing to wait for a month or so before shipping. This actually allowed him to escape disaster when the industry was in a downturn!

3. “Unable to Standardize” is a Rubber Band

I wonder if you understand the above two examples.

What I have been saying about "cannot be standardized" actually means that there is no clear "standard". It is not fixed and strategies need to be adjusted according to different market environments.

Between 2010 and 2016, when you entered Taobao to sell clothing, would you choose personalized, customized clothing?

That definitely won’t happen, right?

We definitely used standardized sales processes and batch sales strategies, because large enterprises and factories had not yet entered the market and the customization market was not mature.

Now, do you still want to enter Taobao to customize clothes?

Definitely not. The e-commerce customization market is already flooded and the threshold is high. If you want to choose to use your personal IP to customize clothing...

The market is constantly changing, and people's perceptions are also constantly changing...

Individuals have their own advantages, and companies have their own advantages, and strategies need to be formulated based on the current situation.

The so-called "unstandardized" products are like a "rubber band", which can be big or small, long or short.

Adjustments need to be made based on your own circumstances and changes in the market environment, just like the e-commerce methods of five years ago definitely need to be adjusted now.

In short, "inability to standardize" is relative. It applies to small businesses relative to medium and large enterprises, and to individual entrepreneurship relative to small businesses. It is not constant.

In this world, everything is relative and changing. We need to learn to find the "unchanging" laws from the "changes".

The "unstandardized" products and strategies shared today are the entrepreneurial philosophy that Teacher Fox has summarized over the years. They have been tested in countless actual situations. As long as you can internalize the content of this article, I believe you will benefit from it for a lifetime, whether in entrepreneurship or in life.

Author: Fox Loves Nonsense