“We approached from around the corner,” or whom a competitor might push out of the market. Part One, Pessimistic

We are all haunted by a nightmare creeping behind a competitor. But not one that works hard and hard, improves its product and slowly reduces the gap with the leader.
No, we are afraid of those who have found a rich (and not particularly money-counting) investor who is ready to throw bags of dollars in the furnace of a startup.

After all, any product or service can be easily copied. Almost any piece of iron can be ordered in China, a program of any complexity will be quickly written by a hired team of programmers.
And then marketers go on the attack under the slogan “the loot conquers evil” and by means of huge material costs they pull the product to the top of the market, finally and irrevocably making it the “king of the hill”.

Fearfully? Let's see how when this option is real.

Let's start with two examples, where we consider cases when a company can really be squeezed out of the market with the help of big money. So…

"Cool brand"

There is a company in China, unknown to the author, that produces fitness bracelets. One of the most prominent is called ID101Hr and looks like this:



It costs 1,500 rubles with an order on AliExpress, and if in bulk, it’s even cheaper.

And then in Russia there are “geniuses” who:

1. order a bag of such trackers
2. come up with brands
3. rivet the sites of these brands
4. print boxes with the names of these brands
5. put ID101 in new boxes

And voila: we get a new product under a fictitious name like BIST or FitWay with an enchanting cost of 10,000 (Ten thousand rubles!). Good margin, right?

Only an invented brand should be convincing. For example, it’s written on the now dead FitWay website that the developers are Russian and for a long time they came up with a special secret algorithm for calculating calories burned. And BIST is positioned as a super reliable latest-generation heart rate reader.

How difficult is it to defeat such a business of a new company with a big wallet?
Elementary!

To destroy a fairy tale of a tech startup with a miracle by engineers, one ad campaign with publications in key iron editions is enough. After that, in the same China, you can order a new batch with a less familiar appearance and come up with a new "high-tech" brand.

The disadvantage of this approach is that for the third time the market will be sure (and not unfounded) that all suppliers of devices that do not belong to large and long-known brands are crooks. And he will not buy it anymore. In general, no one.

“Is Tesla a pioneer or an epigone?”

Is it true that Tesla cars are the first electric cars on Earth? No, they came up with a milestone in the 19th century. Maybe they are the first electric cars sold? No, there are quite a few models on the market from Honda, Mitsubishi, Nissan, etc.

So maybe Tesla uses some kind of miracle technology? Not! Standard batteries are made in China, electric motors of the wheels are in the same place, bodies are no different from gasoline counterparts.

So what's the deal? Why is there so much hype around Tesla?

Let's remember what Tesla looks like. Here it is:



And inside like this:



But here is what a Mitsubishi I-MIEV (sold in Russia) represents outside:



And inside:



Chur me! Is this parody of Matiz worth exactly MILLION rubles? Do they offer me to enjoy hard plastic and tiny seats? Excuse me, such a pleasure is two times cheaper and is called Renault Logan. And that he works on gasoline and cannot park for free, so whoever only has enough money for him will survive. And whoever has accumulated a million will buy something decent with him.

Tesla S costs us from 5 million. But for this money, few buyers get a luxury car. Yes, the brand does not have such a rich history. But it is successfully replaced by innovativeness and "environmental friendliness". Yes, it costs one and a half times more expensive than a similar equipment Jaguar. But in this price category they don’t save so much money.

In general, Tesla on horseback. But are there any enemies who can bring down her not earth? Yes, and there are many of them.

The Chinese happily sneak into the lower segment. Lifan, Great Wall, Geely and others have already rolled out their unpretentious crafts onto the catwalks. Unpretentious, but inexpensive. Those who wanted to buy Logan, may well give them their money. But directly this is not Tesla's threat, not their segment.

But there are other Chinese models that are created for a more demanding market. Here, for example, is what LeEco, a perfect newcomer to the automotive industry, and TV and smartphone maker did:



This is of course a concept, but the Chinese have a short time between the concept and the goods on the shelves. And here already many potential Tesla buyers will think about whether it is worth paying 5 million, if not limited to two. That is, the audience that was going to accumulate on Tesla will now prefer to buy a car right away.

But for those who do not consider money, a classic surprise is being prepared by classic automakers. They promise that soon on the heated Tesla market, expensive and high-quality electric Audi, BMW, Jaguar and (why not) Rolls-Royces will flood. With the same impressive appearance and wood paneling in the salons.

What will a beginner be able to oppose to the grandees, besides being a pioneer?

Double summarize the subtotals ...

• In high-tech times, when new technologies appear every day, and leaders easily become outsiders and vice versa, market leadership is not an advantage.
• In a situation where the products are similar and do not contain clearly visible unique functionality, no brand can serve as an advantage.

And what can be an advantage, we will analyze in the second part.

Good luck with your business!