Get in the Ring

The Attack

Once you have the inside information, use it. That's what Andrew J. Birol does best. Birol, 42, owns Pacer Associates Inc., a Cleveland-based business consulting company, and is the author of Focus. Accomplish. Grow. The Business Owner's Guide to Growth (Pacer Associates). He seems like a nice enough guy, as long as he's on your side. His strategies may not destroy a competitor, but being on the receiving end of them is likely as pleasant as enduring a shark attack.

One of the oldest and best tricks, Birol says, is to "selectively raise prices on high-maintenance, low-margin customers." If you have an undesirable client, jack up that customer's prices 25 percent. "Five or 10 percent, they might understand and try to absorb," says Birol, "but 25 percent is tantamount to telling your client they have ugly children. They'll go."

And to whom will they turn? Your rivals, of course. "While your competitors are rushing in-and regretting it later-you can concentrate on poaching their customers," offers Birol. "If you can move the bad apples onto your competitor and ultimately raise the competitor's costs, it's almost like infecting them with a bad virus." Ouch.

Another strategy, says Birol, is "the fake-out." Birol worked with a manufacturing firm that learned its competitors had been spying on the company by counting the number of trucks hauling products from its warehouse. (See, this sort of thing happens all the time.) Birol advised the company to "fool [the competitor] into believing their new product was a runaway hit." They scheduled 30 trucks to leave the warehouse every day, instead of their normal four. So the competition put its workers on extra shifts to make more-and ended up with a factory full of products nobody needed.

And once, one of Birol's clients, a chemical firm-let's call it Company A-had a traitor in its midst who was feeding secrets to Company B. Since the traitor had signed a contract stating he wouldn't give away trade secrets, Birol's clients made certain the employee would be able to steal an important formula for a new product. Shortly afterwards, the employee went to work for the rival firm, and the stolen product hit the market. "The lawyers started licking their chops," says Birol. Company A sicced its lawyers on Company B, which learned that it couldn't manufacture the product without going to jail; meanwhile, Company A was able to hit the market with its original and legal formula and make a fortune.

So is there a trick to coming up with these tricks? "You know what I think it is?" says Birol. "Recognize that you're dealing with people's egos more than you're dealing with rational behavior, and structure strategies that will provoke-and, frankly, fool-people who are likely to let their egos get in the way of their brains."

Case in point: One of Birol's clients worked with a manufacturing rep who declared, "We won't let you carry this line unless you drop all competing products." The client could have bowed to the rep's wishes, but instead it created "a shell company," says Birol. The company had its employee pretend to quit and strike out on his own, assuming (correctly) that the rep would run into the arms of the newly independent company. "But what do you know?" says Birol. "Eight months later, our [employee] decided to rejoin the company and fold his company back into this one." The rep, having already established ties to the employee's new company, was forced to bring its account to the parent.

RANDOM TACTICS IT'S GOOD TO BE BAD

So you're desperate to obliterate your competitor? Here are two suggestions-but check with your attorney before proceeding.

  • Make your competitor see another type of green: If your nemesis is polluting the skies or planning to raze a meadow to build a warehouse, start a grass-roots campaign against the company. Talk to the press; place ads. Get the public angry. Get them to hate your competitor and love you for caring about the woods and the sky. Talk fondly of Thumper and Bambi, and of your children's health. Weep openly.
  • Sacrifice your family: When your least capable, most bungling family members call you to ask for a job, release a heavy sigh about the shaky economy and then cheerfully tell them about the job openings at the competition.

Geoff Williams has written for numerous publications, including Entrepreneur, Consumer Reports, LIFE and Entertainment Weekly. He also is the author of Living Well with Bad Credit.

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This article was originally published in the October 2001 print edition of Entrepreneur with the headline: Get in the Ring.

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