Competition Strategy To Deal with the Competition - Fusion

Every successful company tailors its own strategy to fit its specific situation.

But there are still four major strategies to Creating and Sustaining Superior Performance:

Cost leadership, differentiation, low-cost focus and low-cost differentiation.

Most strategies used by firms are one of these four generic strategies. Select the strategy that best fits your business and modify if need be.

Consumer and business markets have distinct characteristics by which they function. Earlier, importance was given mainly in understanding customer and their business. But in this age of technology and globalization companies cannot afford to ignore competition.

Companies must keep an eye on strategies and marketing program undertaken by competitors, to remain successful.

Dealing with threats is one thing but if companies are not able to identify their competition than it can cause serious consequences

Retailers like Wal-Mart and Target are facing competition from online retailer Amazon.com. Companies see competition in a direct format. This direct format consists of industry structure, number of players, entry-exit barriers, business model and ability to globalize.

Market looks at competition in much more holistic manner where different products can satisfy a similar need.

Understand competitor’s motive

Companies need to understand competitor’s thought process and goal to be in the market. US companies believe in shareholder value where as Japanese organizations have faith in piece of the overall industry.

Next companies need to understand competitor’s strength and weakness. For example, GM has good reach in USA but its weakness is quality whereas Toyota does not have broad merchant arrange but rather offers quality.

Competitor’s operating pattern also need careful study like competitor’s action in the face of challenge to their position in the market.

Plan an insight framework

To deal with competition companies need to design an intelligence system. Companies need to identify parameters which will help in analyzing the competition.

It is then followed by gathering information for which source and methodology should be finalized. Once the information is collected it should be analysed and sent to appropriate decision makers to act upon.

As there are cost involved in design and maintaining such system, some companies give out contracts to companies which specialize in intelligence gathering activity.

Differentiation

utilization the separation methodology offer exceptional products or services. Having an extraordinary offering gives organizations an advantage over their competitors because their competitors simply can’t offer what they’re offering.

To develop unique products and services, companies frequently invest heavily in research and development — something that many small businesses simply can’t afford. Companies relying on differentiation need to be careful to not develop easily imitated offerings, because that can ruin the uniqueness.

Cost Leadership

The cost leadership strategy is commonly just utilized by huge organizations that can get items inexpensively through economies of scale. They turn around and offer these economically acquired items to purchasers, adding an insignificant mark-up to keep the value low.

The thought behind this methodology is to be the least expensive supplier of a good or service – making it difficult for your competitors to compete with you. Because this strategy requires economies of scale, it’s poorly suited to most small businesses.

Low-Cost Focus

The low-cost focus strategy is like the cost leadership strategy except that it focuses on a specialty market. Rather than promoting an item to the whole population it is marketed to a specific section of the population. The aim of the strategy is to then be the cheapest provider in that portion.

Differentiation Focus

The differentiation strategy, like the low-cost focus strategy, additionally concentrates on a subset of the market. Be that as it may, rather than advertising product or service as the cheapest, it’s marketed as being unique in some way.

For example, an organization may build up an item that is particularly made for left-handed people.

By focusing on a narrow market section, a company can focus its endeavors which may require less assets than building up an item for the expansive market.

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