These two businesses were vastly different. Goods & Stuff was coming from a world of face-to-face selling, with 21 sales representatives on the road, while the competitor is coming from a world of catalog sales. The competitor has momentum that could easily be swung in the direction of online sales, and was investing millions because that is its route to market. Goods & Stuff was hoping to invest perhaps $20,000-30,000 to procure a marketing executive, and compete at the same level. The reality is that this strategy was doomed. Goods & Stuff needed to transform.
They had two options.
Look at disassembling its transport logistics systems and switching to something more efficient. Adjust its customer returns policy to something that aligns better with the market. Increase the number of products it stocks, and switch to online-only sales. It must decide if it’s going to supply retail and wholesale at the same time and not in some disguised half hearted two brands (one for retail, one for wholesale) way.
Look at a different model entirely, which leverages the advantages of having 21 salespeople on the road compared to the competitor’s none. The competitor is having to send out catalogs, while Goods & Stuff can provide solution selling. The competitor has call centers, while Goods & Stuff has face-to-face relationships.
The differences between Goods & Stuff and their competitor may initially be seen as an Achilles heel, but when we looked at the two options, we see that they can be turned into advantages if leveraged correctly. Attempting to compete via option 1 was going to be too costly and unlikely to succeed, given the head start of the competitor.