How to capitalise on failing competitors

How to capitalise on failing competitors

Those who keep a watchful eye on distressed business activity, especially within their own sector, are best placed to capitalise on struggling competitors. They can benefit by snapping up contracts, client banks and assets from failed rivals or in some cases they can even acquire the entire business. These opportunities can help their business to expand quickly with a relatively low capital expenditure.

Law firm Irwin Mitchell, for example, benefitted from its rival Donns LLP entering administration earlier this year. Media reports announced on 23 March that Donns had filed for administration, along with the news that several firms had swooped in to take up its personal injury cases – believed to be in the hundreds.

Sports management consultancy firm Right Directions has also benefitted from a competitor going into administration. They quickly stepped in to take on a contract with Sport England after hearing the news that their competitor PMP Consultancy was approaching administration.

Right Directions secured the million pound contract in October 2010, with the intention of continuing to encourage increased sports activity amongst the general public that will stretch well beyond the 2012 Olympics Games.

The firm saw an immediate growth in their sales after the deal, which resulted in their projected turnover high jumping to more than double that of their previous forecast.

Lighting and audio-visual service provider CPS Group rescued the Stagecraft Technical Services brand and most of its assets out of liquidation earlier this year. The deal transferred across Stagecraft’s significant knowledge in stage building and a large amount of its staging and outdoor structures to CPS, which said at the time that it was also looking forward to working with Stagecraft’s customers.

This presents a strong example of how competitor failings can be used to expand existing sales while providing exposure to new markets. Through consistent, targeted research and good timing, valuable contracts can be rescued and capitalised on.

Those wishing to capitalise on failing competitors need to have the right tools and information at their fingertips as well as the ability to make important decisions fast. These are crucial qualities in the increasingly fast pace of today’s marketplace.