Fighting back the competition is a huge challenge that an organization has to face. Therefore, there should be some competitive strategies to survive even in tough competition. Analysing the competition is the most important work that the marketer need to do before building the brand but how to identify the competition is more important task that needs to be done. Here in this post some factors that the competitor should remember while Dealing with Competition are discussed.
Bases for the Competition – The analysis of the customer is done on following basis :
Based on the consumption and usage of product by the customers.
Based on the marketing efforts like promotion,advertising etc.
Based on the available resources of the company like raw material, machinery etc.
Based on the region.
How to Deal with Competition
Michael Porter has identified 5 forces that determine Segment Structural attractiveness : industry competitors, potential entrants, substitutes, buyers, and suppliers. Threats these forces pose are as follows :
Rivalry in industry
Threats for the new entrant
Threat from substitute
Bargaining power of Buyer
Bargaining power of Supplier
After knowing who the customers are the next important step is identifying the main competitors and analysing their strategies, strengths and weaknesses.
The company should mainly focus on three variables when it comes for competitors, these three variables are:
Share from the total market
Share of the minds of the customers
Share of the heart
There are generally three types of competitors,
Strong and Weak Competitors
Close and distant Competitors
Good and bad Competitors
Selection of Competitors is the very important task that must be performed in a very attentive way as Selecting the right competitors is the base to grow the Completion in future.
Types of Competitions:
Perfect Competition: In this type of Competition very large number of firm are involved with homogeneous products. There is no control over the price s in perfect competition. Financial market is mainly focused and Market exchange method is employed as a Method of marketing.
Imperfect Competition: Imperfect Competitions are of following types-
a)Monopolistic Competitions: Here large number of firms with real or perceived product differentiation are involved. Competition advertising or quality rivalry method of marketing are involved. b) Oligopoly Competition: In this case little or no product differentiation are involved. c) Monopoly Competition:In this case single producer or without close substitutes are involved with the employment of Promotional advertising in case supply is large method of marketing is involved.
Competitive Strategies for Market Leaders:
Following is the list of some competitive strategies that must be employed by the Market leaders to run their business in a more effective way.
Expanding the Total Market
Increase in the usage rate
Defending Market Share – A dominant firm can use six defense strategies :
Mobile Defense – market broadening & market diversification
Expanding Market Share
Some Other Competitive Strategies involve Market-Challenger Strategies
Defining the Strategic Objective and Opponents
It can attack the market leader
It can attack firms of its own size that are not doing the job and are underfinanced
It can attack small local and regional firms
Choosing a Specific Attack Strategy: The challenger must develop more specific strategies