Access to technology has also helped smaller firms compete. Mike Whaling, president of 30 Lines, a social media marketing company, explains, “It starts to level the playing field. It gives small businesses the opportunity to put themselves out there and really compete with larger companies.”31 Sophisticated computer software, once accessible only to large businesses, is now available at prices small companies can afford. In fact, the Web is full of free tools to help entrepreneurs start, run, and grow their businesses. Off shoring is another phenomenon of recent years that has allowed small companies to be competitive. In a Bloomberg Business week cover story on outsourcing, Pete Engardio, Michael Arndt, and Dean Foust observe, “Creative new companies can exploit the possibilities of offshoring even faster than established players.” They use Crimson Consulting Group as a good example. This firm, with only 14 full-time employees, provides global market research on everything from routers to soft¬ware. It farms out the research to 5,000 independent consultants all around the world. Crimson’s CEO, Gleen Gow, comments, “This allows a small firm like us to compete with [giant consulting firms like] McKinsey and Bain on a very global basis with very low costs.”32
SPECIAL NICHE
Almost all small businesses try to shield themselves from competition by targeting a specific group of customers who have an identifiable but very narrow range of product or service interests and comprise what is called a niche market. The niche might consist of a uniquely specialized product or service, or it might be a focus on serving a particular geographical area.
A Wall Street Journal article highlighted the re-emergence of small, niche specialty shops in the United States by writing somewhat humorously about Tom Hanks and Meg Ryan as stars in a sequel to the 1998 hit movie “You’ve Got Mail.” Tom’s mega-bookstore chain Fox & Sons has to file for bankruptcy because the Internet has taken away much of his large-volume discount business. At the same time, an opportunity develops for the re-emergence of a local store to better serve those consumers who prefer not to spend their time searching for books online. Tom and Meg find themselves investing their savings to re-open Meg’s old neighborhood bookstore to take advantage of this niche market.33 This entertaining example is only one of many reasons why the future looks bright for those who are willing to put in the necessary work to follow their dream. In reality, numerous small businesses are uniquely positioned to capture niche markets