One more month and they would have been doomed. Luckily, the economy came back, margins thickened (just enough) and their main competitor finally got off of their back. The past three years had been a marketplace gauntlet.

Now, Benjamin could breathe just long enough to figure out what happened, most importantly, how to position his company so this would not happen again. Benjamin’s stomach lining could not take another economic downturn.

Three years ago, Benjamin’s company enjoyed a distant third position in the market, behind two strong competitors. The competitors were in nearby states, close, yet far enough away to be out of sight (and out of mind). As the economy began to squeeze, Benjamin noticed he was losing small contracts to his out-of-state rivals. When things got tighter, the size of those lost contracts got bigger. Thinking he was on top of his game, Benjamin smiled when he saw his down line competitors having trouble. One filed bankruptcy, another closed facilities, the last just stopped doing business. Benjamin did not see what was happening, nor did he realize that he was the next target.

When times are flush, lots of competitors can co-exist, even the small dogs can live off of the crumbs dropped by the bigger companies. But when times get tough, the bigger companies cannot afford to see their revenues drop, so they get aggressive.

Who do they attack? Number one does NOT attack number two. Number one attacks number six, the weakest and easiest target. With number six out of the way, both number one and number two begin to work their way up the food chain, systematically decimating the market.

The lesson for Benjamin. Always position yourself as number one or number two in your defined marketplace. When times get tough, anything less leaves your company vulnerable to having your lunch eaten. -TF