You are big, i am smart
Today im going to tell you a very interesting success story of a small local company, who outwitted big multinational companies in Uruguay.
As many of you know, Uruguay is a small country. This may be bad for a lot of things business related, but has one good aspect to it. Since its a small market multinational companies don’t care too much about it, which makes national companies have a little better chance to be successful in markets generally dominated by the big ones, as soft drinks and beverages, potato chips and other chiplike products or even bathrooms products and medical supplies.
This story is about a small beverage company (for those Uruguayans “NIX”), who fought hard and fair against the two big soft drink companies, “Coca cola” and “Pepsi” in Uruguay. Using the leitmotiv: “We are small and we all know each other” they started to grow and gain customers everywhere in the country. And since the big companies didn’t really care about this small company, they let it grow unimpeded. After some years in the market, this small company’s soft drink sales beat those of of Pepsi and was getting close to the ones of Coca cola.
So the two big ones had to do something. And what they might even sound ethically questionable. They used their powerful position with the supermarkets, and some say there was even some cash given, to make them close their doors to the products of the small company. This means the small company had a lot of trouble in getting to their customers. A lot people could not buy their products as they weren’t available in the places they looked for them. The big companies shut down the small ones best distribution channel. (note that over 70% of grocery sales in Uruguay are made through Supermarket chains)
Now what to do if you are small, try to sell your product, but big companies cut off your way to get to your customers? You go to these supermarket chains and tell them something like this:
“So, do you want to sell my product? No?… now why?
I know you are being pressured and maybe even getting money from those big ones… so lets do a deal.
I don’t bother you anymore with my products, and don’t report nor do anything about that, but only if you do something special for me.
What? Well, since they tell you not to sell my soft drinks i ask you to sell, and promote, this other product i have, my line of drinking water.” (for those Uruguayans, the water line is called “Nativa”)
In this way they avoided the big companies pressure on supermarkets, and got to the customers in a different way. They changed the game, leaving the big companies out of the picture and selling non competitive products.
Today they still sell Nix soft drinks, and still are not capable of entering in the supermerket chains with that product, but with the “Nativa” water sales they have reached 2. place in sales. A true success story, about how being small does not mean you have to let yourself be beat by the big companies.