Do You Know Your Competitors Business?

We invested in an ice cream franchise and I am not going to mention the name of the franchise but it involves little balls of ice cream.

But anyhow this product was brand new in the country and nobody new what it was about.

Like most countries in the world ice cream is a huge and competitive market even countries were it is cold right through the year.

The biggest mistake our franchisor made was that they underestimated the existing ice cream competition by a mile as they reckoned the product was 100% unique and we needn’t worry and as franchisees will be making a killing as we storm the market.

So even though our product was so unique it was still an ice cream and quite a bit more expensive than that of the normal ice cream already in the market. As a matter of fact the other players are huge companies and have massive market share.

So starting from scratch was a huge under taking and we eventually started to make a dent in the market.

So what did we learn from this experience?

Never ever take the market for granted; never ever just believe your franchisor about the market and competition. Do due diligence!

Our franchisor also told us that they used a reputable market research company to see what our competition was up to and if any. Either they made errors or only researched a small partition of the market, or even worse asked the wrong questions.

They also expected that due to the fact that this ice cream was so new and unique that obviously there should not be any competition. How wrong could they be?

Most people did not like changes to familiar things in their lives, especially their ice cream. It was only scoop ice cream or soft serve, don’t you come and tell me I can have little balls of ice cream. How bizarre and then asking such a small fortune for it as well.

In the beginning the larger ice cream companies didn’t really take any notice from us. A fad that will eventually wither and die, it will never work. But even though we were small and puny they did there utmost to keep us out of retailer shops and sports arena.

As the ice cream became even more popular the ferocity increased from their side, but we managed to stay alive and profitable. Carving a spot for our own brand.

Then on a fine day in 2008, month of September, the franchisor went belly up, bankrupt. But we actually saw this coming, but we all expected it due to their mismanagement.

Conclusion:

Know your competition. Know their shortfall. Don’t discount them because they are competition. Learn from them, even befriend them. Work in unison with them.

A lot of companies work with their competition and manage to survive and grow.

Your Choice Your Company.

http://multo.qondio.com/