Survival for the Small company

Because this new competitions is costly, it creates survival problems for the small members of industries dominated by large firms. It is to be expected therefore, that survival for the small firm will increasingly take the form of carving out highly specialized niches in markets that the large, think big firms have not yet organized themselves to reach, or indeed cannot reach that. Faced with the thriving aggressiveness of mass merchandising stores that sell well known major appliances at relatively rock bottom prices, major department stores have difficulty impressing on the community that they are low priced sellers. Their cost structures generally prevent them from selling these highly advertised commodities at competitively low prices. Speed Queen and Gibson have helped them to make a competitive low price impression. They have chosen not to compete with the major producers in terms of either advertising volume or in the same distribution outlets, they offer their appliances almost exclusively to large metropolitan department stores at highly attractive prices. These stores use their own reputations and local advertising power to promote these brands, thus enabling themselves to make an impact as low price sellers of major appliances while giving otherwise obscure brands the benefit of their reputations.