Competition and Mapping the Game Plan
Strategic market planning takes the competition, their strengths and weaknesses and possible moves into consideration and gives a very high importance to this information. However, the competitive scenario can change with time and the competitors plans also can change with time. Therefore, it is imperative that we keep track of our changing competition and gather enough information on competitor’s plans concursos abertos sp.
To understand the competition properly we need to identify our present competition and the competition in the long term, unfortunately most of the time we are not sure as to who is our competition. If we are not clear on this front we will not be able to formulate proper strategies. Strategy is partly market based but market has two key components the customer and competition that really form the basis for most of what we do.
One might argue that I am not following competition based strategy. It is believed that this is not really feasible because independent of others if an organization focused on innovation and invested huge money into technology to beat competition, these days the innovations are easily copied or modified to come up with an alternative. Even if an organization is possessive about technology there are other organizations whose marketing is not strong and therefore they are willing to sell the rights and diffuse technology into new markets faster than us. Then we have limited choice. Therefore, observing, analyzing watching and preempting competition are essential for successful strategy.
Apart from the need for strategy formulation competition orientation has its merits as a stimulator; a challenge that you need to face which often makes the organization think fast and deep on how to win. The following are some questions that we need to find answers for before we can map the game plan for managing the competitive front.
Which level of the Competition, what is the priority?
Competition in your core business is a high priority. Core business generally gives huge revenues, gives us a brand name an act as the cash provider for the organization. Most organizations build their brand in the core business. Any erosion in market share of the core business will impact the total performance of the company. It is the main fort of the company that needs protection. Within the core the segment and target need to be protection. Protection does not mean preventing the entry of new competitor. Protection means taking adequate precautions to see that there is no change in loyalty of the target due to the disruptive activities of the completion as well. To someone like Harley Davidson it is not enough to prevent others entering the same segment but it is equally important that their basic concept and loyalty are not challenged.
This is not to imply that competition other businesses can be ignored. It is just to say that the impact in other businesses might be somewhat less. It is a different matter altogether if the core itself is changing Then the organization is into a new arena where it has yet to find its coordinates.
Should we Attack the Competition?
It may not be always necessary to attack the competition. Some of the moves may not be significant. To react to completion entering a market that was left open by you would make little sense because it would be assumed that it was left open because the market is not attractive for you. If it was attractive, it should not have been left open. Similarly the resources needed to attack and the benefits that would accrue also would need to be evaluated.
There is always a small set of consumers that drift with new product introductions. This group has no loyalty to any brand. They may try alternate brands and return back to the original after trying alternate brands. To be overly perturbed by such drift may not even be necessary. When to Attack the Competition?
To select the appropriate time to attack competition is important. The competition needs to be studied. Preempting the competition is always better; do not let them in by taking a proactive defensive approach. If they did get in study their viability in the market. This is a dangerous situation to be in and reflect a lack of hold on the market.
Competitor’s vulnerable markets and products need to be under scan continuously and some shake up in the market in these areas would keep the competition under defense.
A defensive competitor is better than an offensive competitor.
How to attack the competition
The question of how to attack is a major one. This means we need to decide on the game plan. We may have several options available. Attacking on the price front is simplest but is also very dangerous one. It means giving up margins, displeasing the distributor, doubts in the minds of consumer. The outcome is doubtful as we can’t be sure that that it will shift the market in our favor. The shift also should be significant enough to compensate for the margin sacrificed. There is also an alternative to increase the depth in the distribution making sure that the positioning is not altered. One can always use the quality and heavy promotion as a healthy combination. There is also good opportunity to launch a version to match the competition instead of disturbing the present product and its price and positioning. In each of these there are enough variations possible and these are left to the strategist to decide.
Where to Attack the Competition
Competitive activities are not necessarily spread through the market. A critical look can reveal whether competition is encroaching the markets where we are weak and vulnerable, markets where we have not shown interest for various reasons or is attacking our main markets where are trying to consolidate. Each of these reveals the intentions of the competition, what are they aiming for, a small share in the market or topple the leader. Each of these aims would call for a different reaction which depends on our resource position and our position in the market.
Which Competitor to Attack
This question would seem bit cowardly and peevish to begin with. But sometimes a little ruthless approach would be needed to save the situation. The primary objective of containing the enemy can be achieved by either attacking him directly or preempting him from taking over the weaker territories which are under other vulnerable market players. This would lead to a consolidation. The consolidation preferably can be achieved by cooperative process between you and the vulnerable party or an aggressive push into these markets to accumulate market share. This approach contains the competition by pre-empting him from attacking these markets for leadership. Given the leadership advantage a future more direct attack on the competition is possible if needed
An experienced business executive, educator and consultant. Many years of experience in industry, as consultant and professor and dean at Indian Institute of Management. Visits Management Institutes and lectures on diverse management issues. Writes on management, education, political and social issues. Active participant of social responsibility and social marketing programs.