300: Should We Worry About Our Competitors

<p>The ferocity of competitors depends on a number of factors.  Are we in a commodity market where price and supply capacity determine all and it is a race to the bottom?  Are we in a narrow band market where there are few suppliers and market share is hard to expand?  Is our business exposed to currency swings?  Are technological breakthroughs by rivals either going to deeply wound us or even drive us to the wall?  Would a regulatory change up end our business relative to our competitors?  Are deep pockets the key to winning in the market?  If our rival poached our key people, would it be a disaster from which we may not be able to recover?</p> <p> </p> <p>In most cases in business, we have tons of competitors and we have to duke it out in the market.  Usually in these cases though there are also tons of potential buyers too.  Usually, we are limited in our ability to access those buyers, relative to our competitor’s capacities.  Your sales team of twenty is dwarfed by the rival’s ranks of hundreds of people able to fan out and meet more clients. New competitors are also often happy to enter into price destruction to buy market share.  You have diligently worked the price up over many years and suddenly all of that effort is out the window, because Deep Pockets is undercutting you.</p> <p> </p> <p>It is all a zero sum game of winners and losers and not much grey in the middle.  What can we do.  We need to build moats around our castle to help us withstand attack from outside.  Now here is the irony.  We need to be doing this before we have a problem.  This is problematic because mentally we are thinking everything is fine.  We are making money and doing well. In fact, we are pretty busy just keeping up with the demands from buyers.  No moat construction spare capacity available.</p> <p> </p> <p>That situation well describes my business in 2018-2019.  We were surging, money was coming in like never before and life was looking pretty peachy, until January 10th, 2020.  Japan’s first case of Covid-19 triggered cance