To address B’s actions, a systematic approach is needed across three levels: legal rights protection, business competition, and internal management. Specific suggestions are as follows:
I. Legal Level: Take Immediate Action to Protect Rights
- Review Partnership Agreements and Non-Competition Clauses
First, review the partnership agreement, shareholder agreement, confidentiality agreement, and other documents signed with A, focusing on:
Whether there are explicit non-competition clauses (including restrictions on duration, geographical scope, and business scope);
Whether there are agreements prohibiting employees from engaging in similar business or using company trade secrets after leaving the company;
Whether there are clauses regarding equity repurchase, penalties for breach of contract, etc.;
If the agreements contain relevant provisions, immediately send a letter demanding that A cease its breach of contract and claim penalties or compensation.
- Assess Whether Unfair Competition Exists
If A took away trade secrets such as customer lists, pricing systems, and supplier information upon leaving the company, or used former company resources (such as customer relationships and internal pricing strategies) to quickly build a low-price system, this may constitute an infringement of trade secrets or unfair competition.
Evidence needs to be collected, including: A’s departure date, the start date of the new business, customer churn, and price comparison data.
Consider filing a complaint with the market supervision and administration department or initiating a civil lawsuit.
- Be Aware of the Statute of Limitations
The statute of limitations for non-compete disputes is typically three years, starting from the date the right is known to have been infringed.
It is recommended to consult a professional lawyer as soon as possible after discovering A’s competitive behavior to avoid missing the opportunity to protect your rights.
II. Business Competition Level: Developing Response Strategies
- Market Positioning Adjustment
Pricing Strategy Adjustment: Assess whether moderate price reductions are necessary for certain products or customer groups, but avoid engaging in a full-blown price war. Never get caught up in a price war with Company A. Your high-price system is a moat; the key is to make customers feel that “the higher price is justified.”
Value Enhancement: Emphasize the differentiated advantages of your products, services, and brand, making customers understand the logic of “high price, high quality.” For example, provide strong guarantees: Offer warranties far exceeding industry standards (e.g., 5 years, 10 years), which is the strongest commitment to quality.
Customer Relationship Maintenance: Focus on maintaining core customers, enhancing loyalty through value-added services and long-term cooperation incentives. Strengthen exclusive services for existing customers who recognize your brand value; their loyalty is the cornerstone of resisting price shocks.
- Product and Service Upgrades
Innovate in product experience, service, or sustainability; value upgrading is the key to breaking through price ceilings:
Build a product system: Emphasize the synergy between your products (e.g., compatibility, combinability), sell “solutions” rather than “individual products,” and increase customer loyalty;
Accelerate product iteration or service upgrades, launching new features or services that A cannot quickly imitate, such as offering customization options—areas where large-scale, low-price competitors struggle to catch up quickly;
Consider launching product lines in different price ranges (e.g., basic, professional versions) to cover diverse customer needs;
Establish technological barriers or service standards to raise the barrier to imitation.
3. Supply Chain and Cost Optimization
If A’s low-price advantage stems from cost control, B needs to re-examine supply chain efficiency and operating cost structure;
While maintaining quality, reduce costs through large-scale procurement and process optimization.
III. Internal Management Level: Risk Prevention
- Improve Corporate Governance
Immediately review agreements with other partners and supplement them with non-compete and confidentiality clauses;
Establish protection mechanisms for key clients and core technologies (e.g., tiered authorization, information encryption).
2.Stabilize the Team and Client
Communicate with the existing team to clarify the company’s development direction and stabilize morale;
Reassure important clients, explain the company’s response measures, and prevent panic-driven attrition.
3. Preserve Evidence
Systematically review trade secrets, client information, and technical materials that A accessed during their employment;
Preserve handover records and non-compete notices from A’s departure;
Record promotional materials and pricing information for A’s new businesses as evidence in potential future litigation.
IV. Important Reminders
Core Recommendation: Consult a professional lawyer immediately. Such disputes involve multiple legal areas, including company law, labor contract law, and anti-unfair competition law, and require professional judgment in evidence collection and litigation strategy. Before taking any legal action, it is essential that a lawyer assess the sufficiency of the evidence, the likelihood of winning, and the litigation costs.
Risk Warnings:
If the partnership agreement lacks a non-competition clause, or the clause is unclear, legal recourse will be difficult;
Price wars may harm the interests of both parties, requiring careful assessment of market resilience;
Litigation is time-consuming and resource-intensive, potentially impacting the company’s normal operations.
Time Window: It is recommended to complete legal consultation and develop a preliminary response plan within 1-2 weeks of discovering A’s competitive behavior to avoid escalating market losses.
Summary of Action Plan:
- Immediately contact a corporate law/labor law lawyer.
- Obtain and review all agreements and documents related to A.
- Begin collecting evidence (customer churn, price comparisons, A’s new business promotions, etc.).
- Decide whether to send a warning letter or file a lawsuit based on the lawyer’s advice.
- Hold an internal meeting to stabilize the team and clients.
- Evaluate market strategy adjustment plans.
The above suggestions are general guidelines; specific actions should be based on a comprehensive judgment considering local laws and regulations, specific agreement clauses, industry characteristics, and other factors.
The following is B’s brand statement to its long-term customers:
Brand Statement to Long-Term Customers
Dear Valued Customers: For many years, our brand has consistently adhered to the core principle of “customer-centricity,” guided by the core values of “integrity as the foundation, quality as the soul, and innovation as the wings.” We strive for excellence in every aspect, from product development and service upgrades to quality control. We deeply understand that the recognition of our valued customers is not the end, but the starting point for practicing our values and pursuing higher standards. From our initial exploratory phase to our current steady and in-depth development, we have never wavered in our commitment to quality, never deviated from the bottom line of honest operation, and never stopped responding to needs with innovation. We also cherish our emotional connection with our valued customers. Every product iteration embodies our unwavering commitment to “quality as the soul” and a deep understanding of customer needs; every service optimization upholds our initial intention of “integrity as the foundation,” striving to bring customers a more considerate experience; every brand upgrade relies on the driving force of “innovation as the wings,” aiming to create a better future together with our valued customers.
Looking back, we are fortunate to have witnessed each other’s growth and cherish every bit of warmth and trust we have received. Some customers have accompanied us for years, even decades. From initial trials to today’s strong recommendations, this bond has transcended a simple supply-demand relationship, becoming our most precious asset on our journey. We deeply understand that the market is ever-changing, and choices are everywhere, but your unwavering support is something we cherish deeply and will diligently protect with concrete actions.
Looking to the future, the brand will continue to uphold its original aspirations and cultivate its expertise. While maintaining core quality, we will continuously innovate and break through limitations, repaying our loyal customers with superior products, comprehensive services, and a more sincere attitude. We will always maintain close communication with our customers, carefully listen to every suggestion, continuously optimize our product and service systems, and strive to become a long-term, trustworthy partner. At the same time, we will embrace change with an open mind, find our direction in the development of the times, and join hands with our loyal customers to embark on a new journey and share the fruits of development.
Our original aspirations remain steadfast; we are grateful for your companionship. Once again, we thank our loyal customers for your unwavering support and dedicated companionship over the years. In the days to come, may we continue to walk hand in hand, offering each other warmth and support. The brand will also move forward with more steady steps and achieve even better performance, living up to every trust and expectation!
This is a formal statement.
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