BusinessWeek had a great article story about how small, local, coffee houses were competing with Starbucks. And not just surviving, but thriving. While Starbucks is its own worst enemy (although they are at least taking the right steps to right the ship) in a lot of areas, including here in Southern Oregon, they are getting their butt handed to them by local, or regional chain.
So how do you compete with a behemoth?
- Zig to their Zag - Competing directly can be suicide. If they are trying to expand into other areas, focus on your core. Or, Muffins vs Cookies. Pleasant people vs the not so nice (at least here).
- Know your niche - They grew because they became an authority on coffee. If you are gonna compete find your niche or sub-niche, like fast service, special Teas better loyalty rewards, etc.
- Work Harder - Howard Schultz works very hard, but the bigger you grow even a 1% bad apple quotient is gonna creep in (if not higher). Be prepared to personally out-work them. I have tried a lot of new places because they were, well, open! Hire other hard workers. Pay them more then the competition and only hire the best. If they aren't fire them and do it yourself. If you can't outspend them (and you can't!) Gotta make this step!!!
This applies to any business. If you say you can't compete, you can't. You won't buy better then them no matter how hard you whine, so work hard, work around them, and know your business and I guarantee success!