Dealing with competition: lessons from Guitar shop on Entrepreneurship

by Ashvini on July 15, 2011 · 15 comments

in Entrepreneurship

No one likes competition. Competition does not only bring you down but always keeps your business on tenterhooks. Competition becomes more when there are plenty of competitors vying for the same target market. It gets more difficult if it is easy to replicate goods and services that you sell. But unfortunately competition is real.

I learned something about decimating the competition from a guitar shop owner. It starts with the fact, that I play Guitar. Oh yes, I am a big fan of Guitar based music ( Rock and Roll kinds ;) ). I love the fact that guitar is a source of unlimited happiness for millions around the world. There have been great rock bands and they have sometimes led to a profound change in lives of people.

I am big fan of Pink Floyd. I have listened to their songs approximately 1 million times :). I love their construction of songs and the way they convey their ideas through them. It is one of the greatest examples of storytelling.

Okay back to guitar. Yes, I love playing guitar ( though not much professionally) . I play it mostly in my room. I was part of the band of one of the companies I used to work for. I still feel that there is tremendous scope for improvement in my playing skills.

My Yamaha Guitar


I though till recently have not been able to give it as much time as I could. One day in the most strange ways an accident happened. I dropped my guitar. To overcome the feeling of guilt, I would say, it slipped from my hands. It flipped and fell on the upside , where tuning keys are located.

One of the tuning keys broke right and now the guitar string could not be tuned at all. Even though I have a spare guitar, this is my favorite guitar and I needed to repair that fast.

There are plenty of guitar shops in my city, but I suspect that most of them are worried only about selling and not servicing. They feel that the moment they sell a guitar or any other instrument, their responsibility is over. If you ever take guitar to them for repair, they often make strange faces :).

So my first instinct is to go to a large guitar shop. The shop I usually go to is located a bit far a

way. The shop that I am talking about is a new large shop. I was of the opinion that since this was a big shop, they would be good at servicing things as well or at least they would have parts available.

To my surprise the shop employees were not willing to help me that much. They showed little interest because I was not buying a big ticket item from them. All I wanted was a tuning key spare. They took a long time to answer my question and it turned out to be negative. I guess their line of thinking w

ent, why would someone need a repair of any music instrument. They can always buy a new guitar.

Then I wanted a new guitar stand for one of my guitar. It was strange that they did not have any.

Frustrated with their behavior and a little scared that I would not get the part anywhere, I decided to drive to my trusted small shop . It was a little far away that is why I avoided going to that place first . This ship has been in existence from last twenty years

Tuning Keys


or so.

If you ever enter this shop, you would find it difficult to even walk around. It is full of musical instruments and there is not an inch of space. It is a very small ( 15ft by 15ft) by all standards. I know the owner from last ten years. More important, he knows me. Even if I meet him one year later, he instantly will recognize me. I am sure of that. So I showed him the broken tuning key. He looked at it intently, asked me a few questions and went in a hole inside his shop( it looked like a hole). He came back with two tuning keys , one of which was exact match for my guitar.

Happy with this result, I asked him if he had a guitar stand. He came back with two guitar stands. I liked one of it and also pur

chased two sets of guitar strings as well.

The fun part is that I have never seen smile vanish from his face whenever I met him. There are plenty of guitar shops that have come up in the same locality but his business keeps humming.

It makes me wonder what lessons we can take from his style of business. He has these threats working against him.

  • He is located in a prime locality which means he has a high cost of running his business
  • He is surrounded by many competitors, some small and some large
  • He is commodity business because all the other shops have same guitars that he has got

Nevertheless the shop becomes more and more successful day by day and he is not worried about any threat.

Here are some of the things I feel that a small business threatened by new and strong competitors can learn from this guitar shop owner.

  1. Know your customer

    As I told before, he probably knows what I come for. He even tells me “long time no see” if I don’t go his shop. He recommends me the products that I want. He does his job in a sincere manner. He never differentiates between customers ( you would see that on big shops)

  2. Always greet them with a smile and build relationships

    If I meet him five years down the line, I am sure he will still recognize me ( or at least pretend to ;). We are all humans and we need to connect and be recognized. By recognizing me every time and greeting me with a smile, I feel that he has won me and many others forever. We don’t probably want to look at other shop even if they offer us great gifts. That is the power of relationship building.

  3. Keep a stock of all things important and get stocks if you don’t have them now

    When the tuning key got damaged, I knew that he would be the one to have the replacement. I was right. He had three varities of them. Once I told him the guitar brand, he came out with the perfect tuning key.If he does not have stuff, he tells you to check back later and often you would find the stuff with him in a visit or two.

    Hence it is very important to keep the right stock and make sure that customer does not leave without getting what he is asking about.

  4. Know your stuff

    I would say he knows his stuff. He takes all kinds of job and he does them well. The important point is not to make a mistake with the job that customer has done. If you indeed made a mistake, apologize and correct it. You are going to get a long term customer by doign that.

  5. Be very careful of the demand

    He never keeps fancy products. If you ask him about a USB interface device for guitar , he would not have one. He only keeps the products that are fast moving. That way he can reduce the inventory costs and keep them to a minimum.

  6. Keep your office crude or simple at best : Do not overspend

    His shop is a very small place ( as I told you earlier), rather crude. He probably would not have a MBA degree but he knows how to keep it relevant to his target market( people looking for cheap guitar mostly students). By keeping the design cost down, he is able to increase profitability of his shop.

What other strategies would you recommend to a small business competing with large business ?

What is your take on article?

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