Competing Strategically as a Small Business
Where They Are Strong, Avoid Them: Lessons from The Art of War
Competing Strategically to Maximize Your Strengths
Imagine you’re the proud owner of a small-town bakery, the kind with twinkling string lights, freshly baked cinnamon rolls wafting through the air, and your holiday sugar cookies in the shape of snowflakes flying off the shelves. Life is good, and business is steady.
Then one day, you hear the news: a well-known chain bakery is opening just two blocks away. They’re offering lower prices, glossy ads, and a loyalty program you can’t possibly match. Suddenly, it feels like you’re competing for the same customers, and you’re worried about losing them to the bigger, flashier competitor. You can feel your confidence waver as you wonder how to compete with their budget and reach.
This is where Sun Tzu’s advice from The Art of War comes into play: “Where he is strong, avoid him.”
Instead of trying to beat the chain bakery at what they do best—like their pricing or marketing scale—focus on what makes your business unique. By leaning into your strengths and positioning yourself strategically, you can not only survive but thrive.
Understanding the Competitive Landscape
Assessing Competitor Strengths
Before you can differentiate, it’s essential to know what you’re up against. Use tools like SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) or Porter’s Five Forces to evaluate your competition. Key areas to assess include:
- Market Share: Are they dominating foot traffic because of brand recognition?
- Resources: Are they using economies of scale or an enormous advertising budget?
- Brand Recognition: Does their reputation draw people in automatically?
Chain bakeries often excel in affordability, consistency, and visibility. Understanding where they shine can help you identify where to avoid direct competition.
Evaluating Your Bakery
Now, take a good look at your bakery. What makes it special?
- Resource Inventory: Are you using locally sourced ingredients or offering unique recipes?
- Community Connection: Is your bakery a place where regulars feel at home?
- Operational Agility: Can you pivot quickly to seasonal trends or customer preferences?
Understanding both your competition and your unique strengths is the foundation of a winning strategy.
Areas of Differentiation (Prioritized by Impact and Resources)
High Impact, Lower Resource Requirements
- Niche Expertise
Specialize in something the chain bakery doesn’t offer—think artisanal sourdough, gluten-free pastries, or elaborate custom cakes.
Example: Feature handcrafted, delicate French macarons in seasonal flavors like peppermint and chocolate. These are the kinds of treats the chain bakery isn’t prioritizing.
Why It Works: Serving a specific niche makes your bakery the go-to spot for customers who want something unique and can’t get it elsewhere.
- Community Engagement
Chain bakeries often lack the local touch that comes naturally to small businesses.
Example: Host a holiday cookie decorating class where families can learn to make their own sugar cookie masterpieces.
Why It Works: Engaging with the community builds goodwill and loyalty, making your bakery a cherished neighborhood fixture.
Medium Impact, Medium Resource Requirements
- Personalized Customer Experience
Chain bakeries can’t replicate the personal touch of remembering a regular’s name or their favorite treat.
Example: Surprise loyal customers with a handwritten thank-you note on their receipt or a small freebie tailored to their preferences.
Why It Works: Customers feel valued when you go the extra mile, and that loyalty often outweighs a cheaper price tag.
- Values-Driven Business
Today’s customers increasingly care about the values behind the businesses they support.
Example: Highlight your use of organic, locally sourced ingredients and share stories about the farmers or suppliers you work with.
Why It Works: Customers are drawn to businesses that align with their own values, and this connection builds long-term loyalty.
High Impact, Higher Resource Requirements
- Digital Savviness
Investing in technology can expand your reach and streamline operations. Create an online ordering system, offer delivery, or develop a social media presence that highlights your products.
Example: Create an Instagram series featuring behind-the-scenes moments at your bakery—like decorating holiday cookies or testing new recipes. Include daily specials to draw in more foot traffic.
Why It Works: A strong online presence can help you reach customers who might not discover your bakery otherwise, especially in a social media-driven world.
- Speed and Agility
Your bakery’s smaller size allows you to adapt quickly to trends or customer preferences in ways larger competitors can’t.
Example: Roll out a limited-edition pumpkin spice croissant for fall, or a gingerbread loaf for winter, responding to seasonal demand almost instantly.
Why It Works: Larger competitors often struggle to pivot quickly, giving you an edge in staying relevant.
Avoiding the Trap of Zero Competition
A market without competition might seem like an open door, but it can also signal low demand. Before committing to a new product or service, validate your idea by:
- Customer Surveys: Ask regulars if they’d be interested in a new product line.
- Minimum Viable Product Testing: Launch a small batch of a new item and monitor customer response.
- Market Research: Use demographic data to improve the likelihood that demand exists.
Example: Before investing in a full vegan pastry line, test a few items at the local farmer’s market. This lets you gauge demand without taking on unnecessary risk.
Practical Steps to Start Competing Strategically
- Assess Your Strengths and Weaknesses
Spend 30 minutes listing what your bakery does best and where you can improve. - Identify Gaps in the Market
Look for areas your competitors are neglecting. - Start Small and Iterate
Test a new idea—whether it’s a product, service, or marketing campaign—and refine based on customer feedback. - Engage With Your Community
Host an event, run a promotion, or partner with a local business to strengthen your community ties.
Winning Strategically
Sun Tzu’s advice—“Where he is strong, avoid him”—is as true for small business as it is for the battlefield. Trying to beat larger competitors at their own game is a recipe for frustration. Instead, focus on what makes your bakery unique: niche offerings, deep community connections, and personalized customer experiences.
This week, take time to review your strengths and weaknesses. What can you offer that your competitors can’t—or won’t? With a clear plan and a focus on your unique strengths, your bakery can thrive in the face of any competition.
Also, if a highly competent stranger wanders into town and offers to help, you should probably take them up on their offer. After all, the Hallmark gods don’t send strangers for no reason.
