When to avoid competition in busienss- Abbas Sajwani

When to avoid competition: sometimes it’s better to pursue a niche

As we all know, Dubai and the UAE are great places to launch a business, with an environment designed to support innovation, ideas and entrepreneurship.

But, as with everywhere else, unique ideas can be few and far between. And even if you have had a one-off idea, there will quickly be ‘copycat’ companies jumping in on your business idea and copying your innovation, design and even business model.

As a start-up, if you are launching a ‘copycat’ business, it can be extremely tough. You haven’t got the brand cache, first-to-market advantages or clients that established players may have. You might have the passion, but often it seems like your business is playing catch-up with other players from the get-go.

So, when thinking of a business, isn’t it better to carve your own niche?

A desire to simply emulate a successful business often isn’t enough for survival. Yes, markets can be large enough to allow for several operators, but the more players, the more price-sensitive the market can be.

We know from history that some of the best business ‘eureka moments’ spring from unexpected sources. Entrepreneurs must be ready to think outside the box and create companies that are agile, lean and ideally, serving an emerging niche.

Having your own niche delivers a number of advantages, including:

Discovering a viable gap in the market, or creating a new product provides you with immediate market advantage, being first to market, and a new product will surely generate its own ‘buzz’.

You can develop your product or service to your own specifications and create pricing that doesn’t have to adhere to existing structures. Not having market expectations means you can get creative, make sure the product is exactly what you want it to be, and allow for dynamic, swift changes to the product in the first few months of business, as you learn on the fly.

Small is beautiful – as a start-up, you’re probably going to be lean, agile and can react swiftly to changing market needs and dynamics. This is a great advantage, especially in the fast-moving markets of today.

The local business environment lends itself to encouraging innovation, so why not take advantage of that? There are dozens of incubators, labs, co-working spaces and networking opportunities. Carve your niche, and let others follow.

Taking on huge companies with well-established markets, marketing strategies, and huge war chests isn’t as much fun as discovering a need no one else has, pursuing that idea and turning your vision into reality.

And of course, a small, responsive start-up with lower costs and overheads can organically create a niche market. A small player might make very good business selling vegan shoes for nurses, for example, but could fail if it simply sold shoes.

Ask yourself if you – and your company – has what it takes to master the niche, and check if the potential customer base is viable.

Niches can be highly lucrative, and larger, established companies might not have the focus of a passionate start-up business. Take advantage of local knowledge and market understanding to fight competition from large, powerful multinationals.

You might be highly successful creating a chai or gahwa outlet in the UAE, for instance, but it might not work in Paris, and your competition, such as Starbucks, for instance, will simply not localise their business strategy to that extent.

India’s biggest scooter manufacturer, Bajaj, survived Japanese scooter giant Honda’s arrival in India, for example, by doubling down on its brand cache, and its cheap, reliable scooters, served by a national network of cheap roadside repair shops.

Think carefully before embarking on any business. But my key advice is to spend a great deal of time on due diligence before embarking on any venture.

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