What is your strategy for attacking a giant corporation?

Redesigning the Market with R&D or Innovation

If you want to enter a market, you have to know all the strategic parameters of the companies operating in the market. Because all companies want to be a monopoly in their market. This puts them at an advantageous point on the supply and demand curve.

In addition, each new entrant feeds on the shares and turnover of those already in the market. Yes, in growing markets, this may not be a big problem at first. But sooner or later the market reaches its growth limits and competition becomes fiercer. So when you enter a new market, the giant companies suppress your activities and image by cutting prices on their products and advertising more. They make life difficult for you.

The only way to destroy a giant company in the market is to redesign the market with R&D or innovation. 

However, giant companies that grow vertically and take over sales channels do not give you the right to live. But even in this situation, there is something you can do.

Founded in Japan in 1889, Nintendo Co., Ltd. (NES as it is known in the US), a playing card manufacturer, later expanded worldwide as a video game and electronics company (you remember Super Mario, right?). It subsequently designed the Gameboy portable game console system in 1988.

The main character of the NES, Mario, an Italian plumber who looks like a Mexican, has appeared in more than 200 games, starting with Donkey Kong. He was also used in tennis, golf, car racing and educational games. At the time, young children identified with Mario and his toys sold out.

Its competitor, Sega Games Co. Ltd. was founded in 1960, but it never had a chance against the NES until then. Therefore, in 1988, it released the 16-bit Mega Driver, known as Genesis, which was much faster than the 8-bit products of the NES.

But this was not enough to bring down the giant in the gaming industry. At the time, designing games in the same style by imitating its rival Nintendo would only mean getting the same enjoyment faster for the user. And that didn't mean much for the customer.

Sega created a new kind of game philosophy that used the leverage of speed. Roller blades and Coaster in particular were the backbone of this philosophy.

The new type of game, called Sonic the Hedgehog, was released in North America, Europe and Australia on June 23, 1991, followed by Japan a month later.

However, the marketing of this game had to be underpinned by an excellent sales philosophy. Because, according to the sales philosophy, if left to themselves, customers would not buy enough of the firm's products due to inadequate prioritization, competition, promotion of substitute products, etc. (For those interested: Porter, 2008, The Five Competitive Forces That Shape Strategy, Harvard Business Review).

Therefore, Sega had to run an ambitious but different sales promotion campaign.

If Sega had attacked the NES directly and launched a massive advertising campaign, the NES, with its financial strength, could have easily beaten it with a massive advertising campaign. If it had cut prices, it would have lost money on products whose sales volume did not break even with the total cost, and would not have gotten the cash return it wanted.

Sega: The Concept of "Guerrilla Marketing"

But Sega formulated a very different strategy. According to experts, Sega's success was essentially a battle between Sonic the Hedgehog hero Sonic the Hedgehog and Mario. If the NES was to be destroyed, Mario had to be defeated in the public consciousness first... With its actions, Sega introduced the concept of "guerrilla marketing" into the business literature (This type of marketing existed before it. But the success was so spectacular that the concept became synonymous with Sega).

So a very different image was created for Sonic the Hedgehog. He was no longer supposed to represent the good kids, but the crazy youngsters. He was a punk, he had a slightly devilish look, but he was very cool. Students were hired to spread this image on campuses. They wore clothes designed for Sonic. They were always talking about Genesis. They were living copies of Sonic the Hedgehog.

Eventually it happened. The youth chose Sonic the Hedgehog, who looked like them, not the children's hero.

Sega products outsold its rival, the NES, in the US.

Let's not forget that you, too, will often enter markets where the big sharks are circling. The only way to survive here is to exploit strategic advantages.

Success is possible but not easy.

Reference

Netflix Documentary High Score.