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recent bookmarks from jerrykingNo time like bankruptcy for squeezing competitors2009-07-15T15:01:12+00:00
http://www.theglobeandmail.com/report-on-business/managing/no-time-like-bankruptcy-for-squeezing-competitors/article1215959/
jerryking>Consignment pricing<<, where the customer pays only after the product is sold, is the ultimate extended term and will be difficult for a competitor in bankruptcy to match.
Boost marketing expenditures. Raising your advertising and point-of-sale spending will have a similar effect: Either your competitor will also have to spend more, or risk losing customers that you attract.
Lengthen the "tail" of the revenue stream. Add more after-sale services and spiffs - if your competitor has to do the same, it will raise the cash costs of getting and keeping customers.
Launch more products. New product development and introduction eats up a lot of cash - and a **cash-short** competitor is unlikely to be able to do the same. If you go all out, introducing many more new products than a bankrupt competitor possibly can, you could make your rival's offering obsolete in the minds of customers, forcing it into >>fire sales<< in a panic to raise cash.[JCK: panicked selling off of assets]
Pursue your competitor's most profitable customers (perhaps identified via geofencing). Good management teams know where their company makes and doesn't make money. Great management teams know this about their competitors.
This insight can be used to target customers, geography, products and services of the bankrupt competitor to gain market share.
The competitor will be hesitant to counter your move against its most profitable customers because it needs the cash these customers generate. It will be more likely to maintain the status quo with these customers in the hopes the cash will keep coming.
Lawsuits. Now is the time to file the lawsuit you've always wanted to. Your bankrupt competitor will not have the discretionary resources to fight and will likely come to terms quickly.
There are also broader strategies to consider. Among them:
Sell against the competitor. When companies are in trouble, customers may worry that they won't be around to service products or provide future upgrades.
This fear can be a powerful weapon: These customers may be persuaded to take their business to companies on a sounder footing.
Go after the best talent (poaching). Anxiety about the plight of the competitor will be just as rampant among your rival's employees and suppliers as it is among customers. You can leverage that angst by going after top talent and strong suppliers - and offer terms and conditions that your competitor will have a tough time matching.
Force the sale of attractive assets held by your bankrupt competitor. A competitor in protection is not its own boss. The creditor committee is likely to care more for the cash it can get from an asset sale than who buys the assets.
]]>George_Stalk_Jr. competitive_advantage competition bankruptcies hardball offensive_tactics supply_chain_squeeze BCG consignment_pricing geofencing lawsuits marketing new_products poaching product_development tough-mindedness selling_off fight-or-flight ruthlessness cash-strapped fire_sales financial_distresshttps://pinboard.in/u:jerryking/b:bada1c94ae96/