Competitive Strategy

Michael Porter's seminal treatise was a study of how to sustain market position and viability without losing money … it works up to a point.

It’s a bit like Quantum Physics you know, there comes a point where things are small enough where they are neither particle or wave, matter or energy. In small business in Australia the forces of competition and customer discretion are so intense that normal sales and purveyance practice is distorted in the same way that a gravity well in the heart of a large star distorts our physics.

Normal niceties of retail trading theory are suspended in a dog eat dog locally competitive environment.

I met Dr Porter once as a customer in a store I was managing in the city in 1987, he was polite and charming and appropriate, but I didn’t make the sale. It didn’t matter that we had demonstrated the best Cd player to him in a comfortable environment and were actually employing one of his own students to do the demonstration. In spite of all the non price based additives we had added to our offer, he and his two followers left the store “to think about it” and purchased their three Marantz CD65 Cd Players from a nearby business that was casually able to offer them a better price without the trimmings.

So much for the competitive strategy of the business I was working in back in 1987…

In 2013 the local marketplace dynamic actually hasn’t changed much. Although there are no longer specialist Hi Fi stores in the city, it just is too costly to maintain premises in CBD with the margins available to purveyors such as ourselves; our demographic neighbourhood is well congested with both highly professional and cost conscious local retailers and a plethora of sometimes anonymous internet purveyors with siren like retail enticements on consumer electronics.

Sometimes dealing with astute Australian Hi Fi purchasers is a bit like knife fighting in a dark alley, you never know where the next stab is going to come from, sometimes you land a lucky blow without positive intent, sometimes you think everything has gone well with a client with multiple positive interactions and you still come away with a blade in the back.

I had occasion to be sitting at a large table with two of my most immediate and effective competitors this week, one is older and much wiser than me and the other is younger and smarter. I came away thinking the Stauffenberg approach to meeting management would probably have been an appropriate competition response …

Honestly people, there is no better deal you can get than by shopping carefully and astutely in Melbourne, right now we are one of the foremost cities for good Hi Fi shops in the world with a number of very strong and very individual businesses determined to sell you something and honed by a unique multi cultural trading environment.