Areas of Competition

6 Key excerpts on "Areas of Competition"

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  Darwinian Fitness in the Global Marketplace

  Analysing the Competition

  • P. Rajagopal(Author)
  • 2012(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  34 2 Understanding Market Competition Competition may be characterised as striving together to win the race, not to destroy the other competitors, from the point of view of the supporters of globalisa- tion. Local market competition is targeted towards the customers, and the com- petitors strive to win the customer, temporarily or permanently. However, in the business-to-business process, the competition may turn more tactical and strategic in order to outperform rivals firms. In this way competition can be seen as a regu- lated struggle. There are rules of economic competition and they do not generally include the destruction of competitors. The technology of marketing research is devoted to the difficult tasks of discovering customer needs, and the sub-disciplines of consumer and organisational buying behaviour attempt to provide theoretical bases for the results. In this process the emphasis is on determination to win customers where competitors turn tactical towards brand or product positioning. The discussion in this chapter is woven around the above arguments and shares academic insights on learning market competition, competitive strategy, technol- ogy and competitive advantage, defensive growth process of firms, and process of strategy implementation in the competitive marketplace. Theoretical framework of competition The philosophy of the free enterprise system has been built on the basics of competition. Competition is found in all marketing functions which include the prices at which products are exchanged, the attributes and qualities of products manufactured, the volume of products exchanged, the methods of distribution, and promotion. The school of thought, which has constructed competition-related theories, may be categorised in two groups: economic theory and industrial organisation perspective. Economists of the former group have discussed many different models of competition.

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  Strategic Analysis

  Processes and Tools

  • Andrea Beretta Zanoni(Author)
  • 2011(Publication Date)
  • Taylor & Francis

    (Publisher)

  6  Competitive Analysis Competitive analysis focuses on the following areas of study:

  • the available options for choosing the competitive position;
  • maximizing one’s competitive objectives;
  • resources, capabilities, strategic competencies and processes.

  Analysis of the Available Options for Choosing a Position The part of the analysis specifically dedicated to choosing one’s position focuses mainly on the following questions:

  • What are the characteristics of the competitive arenas in which a firm operates and of the competitive results obtained in each of these?
  • What are the critical factors in the various arenas and the relative strengths and weaknesses of one’s firm and those of its competitors?
  • Will it be possible to find a new position? And how will needs/demand be met?
  • Does the technology sustain and carry out the various positioning options?

  To answer these questions we need to consider different elements of the competitive structure, particularly:

  • the characteristics of competitive arenas;
  • the competitive position obtained in each of them (including critical factors and relative strengths and weaknesses).

  Analysis of the Competitive Arenas An analysis of the competitive arenas must allow one to:

  • correctly identify the competitive arenas and the nature of competitive relationships that exist between players;
  • assess the size of the market;
  • understand the nature of the competitive arenas.

  Similar to what occurs with strategic grouping and in strategic business areas, a competitive arena is formed as a consequence of the positions chosen by individual companies; in other words, this space originates from an overlapping of competitive positioning. That is why relationships between rival companies can be of variable intensity according to how overlapped the positions are.

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  Competing for Customers and Winning with Value

  Breakthrough Strategies for Market Dominance

  • R. Eric Reidenbach, Reginald W. Goeke(Authors)
  • 2006(Publication Date)
  • ASQ Quality Press

    (Publisher)

  8 Chapter 1 of its competition. A key point is that the organization has chosen to compete within these arenas and is not forced to do so. This is an overt decision on the part of management based on their estimate of potential returns to the orga- nization. The question that has to be answered at this level is How does the organization compete? The decision as to where the competition will take place has been decided; now it’s time to decide how the organization will ef- fectively compete. This is where profitable market share is actually won or lost. Each prod- uct/market will have its own set of competitors. For example, going back to our banking situation, banks offer home loans, auto loans, brokerage services, credit cards. Looking at just credit cards, banks compete against other banks, brokers that offer credit cards, auto companies (GM), retailers (Sears), and telecommunication companies (AT&T), among others. These competitors are different from those that occupy the home loan competitive set or the broker- age set. Each competitive set brings certain capabilities to the market that must be taken into account if the organization is going to be an effective competitor. There are a series of questions that must be answered at this level: 1. What is the organization’s current value proposition? Competitive strategies involve determining the basis of customer or client deci- sion making. Generally, these are based on some combination of quality, reputation, and cost. And the interaction of these criteria is the very essence of value. Competitive market planning therefore must focus on customer value because customer value is also the strongest leading indicator of market share (Gale, 1944). Value is the vehicle for building an organization’s profitable share by ac- quiring new customers who seek outstanding value while retaining current customers who are happy with the value they are receiving. Every organization has an existing value proposition.

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  Competitive Intelligence

  • C. West(Author)
  • 2001(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  In service businesses it is the basis of the service offer and the methods by which the service is to be delivered that need to be studied. 43 Framework for Competitive Analysis Sales and marketing intelligence The study of a competitor's sales record including an analysis of segments serviced, customers won and lost, market share and sales volumes provides a clear indication of performance. An analysis of marketing resources, processes, procedures and routes to market, coupled with a measurement of the volume (and cost) of marketing activity, provides a highly visible barometer of where a company is directing its effort and the intensity with which it is pursuing its sales objectives. Analysis of the language used in advertisements and promotional literature can also indicate how the competitor sees itself and tells something of the culture that is prevailing within the organisation. The study of marketing activities can be extended to cover the results of the process in terms of the customer base the company has succeeded in acquiring and its key accounts. The analysis can be taken further to consider the awareness of competitors, the relation- ship between competitors and their client bases, satisfaction with competitors' performance, the levels of client loyalty and the image of competitors in the marketplace. Pricing and discount intelligence Price is one of the key elements in the competitive battle and although competing on price is widely regarded as an admission of failure, it may nevertheless be the final arbiter of who wins the business. Prices are either extremely easy or extremely difficult to collect. Those that are displayed or published can be easily observed but where prices are tendered more sophisticated methods are required in order to obtain them.

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  Strategic Marketing

  An Introduction

  • Tony Proctor(Author)
  • 2014(Publication Date)
  • Routledge

    (Publisher)

  Chapter 6

  Analysing competition

   

  INTRODUCTION

  All firms have strategic windows and some of these windows open out on to markets that are shared with other firms. Where windows share views over the same market, competition exists. It is important to understand how different firms view the same market since their perceived and actual windows of opportunity will not all be the same.

  The nature of competition and the factors which influence it are explored along with how firms identify competitors and how they use product positioning to obtain a competitive advantage. Attention is paid to how firms define their marketing strategies and analyse the competitive positions of rivals. Consideration is given to the various sources of information available to firms that enable them to gauge competitors' strengths and weaknesses.

  Success in the market place depends not only on an ability to identify customer wants and needs but also upon an ability to be able to satisfy those wants and needs better than competitors are able to do. This implies that organizations need to look for ways of achieving a differential advantage in the eyes of the customer. The differential advantage is often achieved through the product or service itself but sometimes it may be achieved through other elements of the marketing mix.

  Attention in this chapter is given to Porter's five forces model to portray the various factors which influence competition and how this influence is effected.

  Actually identifying competition may not always be quite straightforward. It is important to be able to correctly identify different types of competitors so that suitable reaction to their marketing strategies and tactics can be put into practice as and when required.

  The various bases of competitive advantage are discussed and reference is made to Porter's strategic thrust typologies. This is then followed by a discussion of the various typologies of competitors that can be identified and the kind of strategy each one employs. Finally, the chapter ends by looking at how to assess competitors' strengths and weaknesses and the sources of information that should be consulted to make this possible.

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  Meeting Customer Needs

  • Ian Smith(Author)
  • 2012(Publication Date)
  • Routledge

    (Publisher)

  Competitors exist within many different spheres. Some of you who have always operated on the principle that you were not in a competitive environment may find it disturbing to consider that competition exists for you, too. This chapter will help you understand the nature and scope of competition – whatever form it takes. In most cases this will exist within a market-place of some sort but it is a mistake to assume that markets apply to every situation. Where markets do not exist, understanding how provision is shared between organizations or agencies will help improve delivery to customers or clients. In a number of circumstances competitors will not be competing on the basis of shared or similar provision (see below).

  What do we mean by competitors? Competitors are individuals, groups or organizations that provide alternatives to what you provide. They may offer these alternatives in a non-competing way and you may coordinate the provision with your competitors. If that is the case it will be easier to work with these providers to explore the differences between your provision, how the customers choose and how well you cover the spread of needs within your combined customer base. What you learn here is still important.

  However, you may be in a situation of true competition where the alternative providers are seeking to win customers from you and you are seeking to do the same to them.

  Please note: In some circumstances, notably in internal situations and in many bureaucracies, competitors will be competing to win resources, not customers. Departments and individuals who develop strong, customer-facing management practices will, as a by-product, strengthen their position within their organization. However, the competing for resources to the detriment of other departments within that organization is seldom the most constructive type of activity to pursue and usually deflects from the core purposes of the organization itself. As a result, this sort of competition will not be the focus of this chapter.

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