“We have come from the corner,” or who might be forced out of the market by a competitor. Part One, Pessimistic

We are all haunted by the nightmare of a rival sneaking up behind us. But not the one who works hard and much, perfects his product and gradually reduces the gap with the leader.
No, we are afraid of those who have found a wealthy (and not really counting money) investor who is ready to throw bags with dollars into the furnace of a startup.

After all, any product or service can be easily copied. Virtually any piece of hardware can be ordered in China, a program of any complexity will quickly write a hired team of programmers.
And then marketers go on the attack under the slogan "loot triumphs over evil" and by means of huge material costs they pull the product to the top of the market, finally and irrevocably making it "king of the mountain."
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Fearfully? Let's see how much this option is real.

Let's start with two examples, where we consider cases when a company can really be ousted from the market with a lot of money. So…

Cool Brand

There is a company in China unknown to the author that produces fitness bracelets. One of the most prominent is called ID101Hr and looks like this:



Such a toy costs 1500 rubles with an order on AliExpress, and if it is in bulk, it is even cheaper.

And then in Russia there are “geniuses” who:

1. order a bag of such trackers
2. invent brands
3. rivet sites of these brands
4. print boxes with the names of these brands
5. put ID101 in new boxes

And voila: we get a new product with a fictitious name like BIST or FitWay with an enchanting cost of 10,000 (Ten thousand rubles!). Not a bad margin, right?

Only a brand invented should be convincing. For example, on the now dead FitWay website, it is written that Russian developers and they have long invented a special secret algorithm for calculating calories burned. And BIST is positioned as a super reliable last-generation HR reader.

How difficult is it to defeat such a business of a new company with a big wallet?
Elementary!

To destroy the tale of a tech start-up with a miracle, engineers need only one advertising campaign with publications in key “iron” editions. After that, in the same China, you can order a new batch with a less familiar appearance and come up with a new "high-tech" brand.

The disadvantage of this approach is that, for the third time, the market will be confident (and not unreasonable) that all suppliers of devices not belonging to large and well-known brands are crooks. And no longer buy. Nobody at all.

"Tesla - pioneer or epigone?"

Is it true that Tesla cars are the first electric cars on Earth? No, they came up with a landmark in the 19th century. Maybe they are the first selling electric cars? No, there are a lot of models from Honda, Mitsubishi, Nissan, etc. on the market.

So maybe Tesla uses some kind of miracle technology? Not! Standard batteries are made in China, the electric motors of the wheels are there, the bodies are no different from the gasoline counterparts.

So what's the deal? Why is there so much hype around Tesla?

Let's remember what Tesla looks like. Like this:



And inside like this:



But what is the Mitsubishi I-MIEV (sold in Russia) outside:



And inside:



Chur me! Is this a parody of the Matiz worth exactly MILLION rubles? I propose to enjoy hard plastic and tiny seats? Mercy, such a pleasure is two times cheaper and is called Renault Logan. And that he works on gasoline and cannot park for free, so whoever has enough money for him will survive. And who has saved a million, will buy something decently for him.

Tesla S costs from 5 million. But for the money a few buyers get a luxury car. Yes, the brand is not so rich history. But it successfully replaces innovation and "environmental friendliness." Yes, it is worth one and a half times more expensive than the Jaguar similar in equipment. But in this price range, money does not save so much.

In general, Tesla on horseback. But are there any enemies who can knock her off the ground? Yes, with a lot of them.

In the lower segment, the Chinese happily sneak. Lifan, Great Wall, Geely and others have already rolled out their homely crafts on the podiums. Unprepossessing, but inexpensive. Those who wanted to buy Logan, may well give them their money. But Tesla is not directly threatened, not their segment.

But there are other Chinese models that are being created for a more demanding market. Here, for example, what made the most perfect newcomer to the automotive industry, the manufacturer of televisions and smartphones LeEco:



This is of course a concept, but among the Chinese between a concept and a product on the shelves, the term is not long. And here, many potential Tesla buyers will think about whether it is worth paying 5 million, whether to limit it to two. That is, the audience that was going to accumulate on Tesla will now prefer to buy the car right away.

But for those who do not consider money, classic automakers are preparing a pleasant surprise. They promise that soon the Tesla warmed up market will be rushed by expensive and high-quality electric Audi, BMW, Jaguar and (why not) Rolls-Royces. With the same impressive appearance and wood paneling in the salons.

What can a newcomer be able to oppose to grandees, except for the status of the pioneer?

Let us sum up the subtotals ...

• In high-tech times, when new technologies appear every day, and leaders easily become outsiders and vice versa, primacy in the market is not an advantage.
• In a situation where products are similar and do not contain well-marked unique functionality, no brand can serve as an advantage.

And what can be an advantage, we will analyze in the second part.

Good luck to your business!