Penetrating A Market Dominated By Big Firms

Nation's Business, Nov 1, 1998 by Thomas Love

Many small businesses face the challenge of having to compete with larger, better established companies. Although this can be extremely daunting, particularly for entrepreneurs just starting out, such competition is not insurmountable.

Alexis Dormandy, executive vice president of Virgin Cola, a company that recently began competing in the United States with two of the best-known brand names in the world, Coca-Cola and Pepsi, has some insight into taking on the big guys.

Don't do what they do, he says, because they'll be better at it. "We're never going to be better at being Coke than Coke is, whether you're talking about marketing, distribution, public relations, or anything else," Dormandy says. "Imitation is a no-win situation." Rather, he says, do something different that sets your company apart.

Also, nurture an organizational culture that encourages innovation, he says. "We tend to run a company contrary to a lot of businesses where people are put into their boxes and have their jobs narrowly defined. People must have the freedom to go out and try new things, even if they will make mistakes." Dormandy adds that employees will also get some things right. Moreover, he says, 'You don't punish people for getting things wrong if they're trying their best."

Although Virgin Cola is not a small startup-it's part of the British-based Virgin Group, a global collection of enterprises that include Virgin Atlantic Airways-the soft-drink firm began U.S. operations just last May Dormandy says that whatever innovative steps the firm takes to differentiate itself in the market must be based on a solid foundation. He cites the example of Virgin Atlantic: "You can have an airline that has TVs in the hack of its seats and offers massages and pedicures, but the plane better have two wings, engines, the best pilots you've ever seen, and good service,' or people won't fly on it.

Virgin Cola, launched in late 1994 and now the third-largest cola brand in the United Kingdom, established its U.S. headquarters in Los Angeles and is sold in California and in the Boston, New York City, Baltimore, and Washington, D.C., areas.

"We're trying to stick to those markets for the moment, but we will very shortly be expanding into other areas," Dormandy says. "The key thing is getting what we're doing right before we start rushing out to do anything else. You don't want to spread yourself so thin that you end up being average at a lot of things."