Competition can bring new energy and ideas to any organization. For example, when the owner of an independent coffeehouse in California saw a Starbucks going up directly across the street, she didn’t roll over or run away. She capitalized on the giant’s momentum—in effect, pushing when she was pulled. When Starbucks bought huge newspaper ads announcing its new line of organic coffees, she had a quick-print shop produce a storefront banner that said, “Serving 5 organic coffees”. A “Push When Pulled” tactic like that “weakens your opponent’s position by using his momentum to your advantage,” says Harvard Business School professor David B. Yoffie.

Wal-Mart successfully did it to Kmart in the 1980s. “They posted Kmart’s weekly circular at the front of their stores and promised that Wal-Mart would match or beat any of the advertised deals,” wrote Yoffie, author of “Judo Strategy.” Smaller players should “take advantage of all the momentum [the dominant player”> has created” and then do things they can’t.” If you happen to be a dominant player, you benefit, too. Small competitors can help sharpen your competitive instincts and push you to be better. Many years ago, for example, Pizza Hut executives tried to find out why the company did so poorly in Chicago. They discovered that local deep-dish pizza was (pardon the pun) eating their lunch. Deep-dish pizza subsequently became a key impetus behind Pizza Hut’s explosive growth.

HBS Working Knowledge 26 May 2003