There has been a lot of talk that only large scale players will eventually survive in the market especially if FDI( Foreign Direct Investment) norms are further relaxed . Of course they have bigger budgets and higher liquidity and can sustain losses for the short run to put any small player out of business. Sounds so planned right? But then how can the small fish survive in the land of sharks?
The key for the survival of the small player lies in the following:
1.Market Knowledge: The Big player can hire the best market analysts to build up his customized portfolio but can he match the small player's expertise in the local market ? No ! That is because just like the big player has unlimited supply of resources, he inherits with it a huge baggage of liabilities as well forcing him to focus his strategies only on the bigger picture like cities or states, leading to a holistic point of view when it comes to focusing on smaller towns. That is precisely where our small player can work his way up. He has in depth knowledge about the locality and knows what sells and what doesn't !!
2.Price Vs Service: The perennial dilemma ! A superior supply chain and greater available liquidity will ensure that the "shark" is able to deliver at a lower price which the small player cannot match. His answer will lie in a superior service: Door to Door delivery, On telephone order confirmation and a superior after sales service.Most importantly the small player has to make best use of his proximity to the small distinct target market.It is difficult to say who will win, but given a choice I would always prefer a superior service as long as the price difference is within limits!
3.Personal Touch: Though it is actually a part of service, yet its significance as a separate entity cannot be overlooked. A small player will always ( or at least more often than not) greet you by name and ask about your family's well-being. Bingo ! This sells !! There lies the USP. Business is always built by good behaviour and good behaviour leads to an emotional attachment which generates to sales. Simple, isn't it ?
4. Cluster: Big players claim they have the most diversified range of products in each segment. A small player cannot do that with a limited budget. So what should be his answer? He should join hands with others and set up cluster of shops than exist as a stand alone. This will definitely boost his chances of survival in the market. Practical examples of this in existence are the books and fabric markets which are always located in clusters and as a result when people think about buying any book or fabric they go straight to these clusters as they are assured of finding the product suited to their needs.
Another area that the small players should focus is towards making their supply chain lean: A possible way would be join hands(like in cluster) and source in bulk quantity directly from the supplier without any middlemen- That would enable them to play the price game effectively!