Competition is at the core of capitalism. Seriously, that won’t change anytime soon. Rather it is going to continue to grow intense. It is up to businesses to constantly locate competitive advantages and build a long term position therein.
The market is a circus of bulls these days – it has few places for doves except those who dare to get trampled upon in a bestial fight. Every business, in every sector, has got a competition somewhere somehow. Since it is a global market, one’s competitor may be located as far as Shanghai or Frankfurt.
Open seas, air, and internet connectivity, along several tactical guidelines carved by the World Trade Organisation [WTO], are driving weaklings out of the modern day economy. Take for instance Huawei is as strong in Europe, Nokia’s own territory, as it is in China, when it comes to supplying telecommunications equipment.
A global structure is necessary to dominate the domestic market. This fleet-footed approach helps businesses grow a far-sight to capture opportunities beyond their territories while positioning to defend whatever advantages they enjoy locally.
Precisely, competitors come in different sizes and force. There are strong competitors, weak competitors, close competitors, distant competitors, well-behaved competitors, and disruptive competitors. Services and products that belong in different sectors can be substituted for each other in the marketplace. You talk about substituting cinema hour for soccer match. Firms in Asia may provide reasonable options in terms of prices and benefits than home suppliers. Utility software offering IT suites manned by a team of 5 employees in California may prove a strong headache for a HR firm located in Lagos.
How then can your business build a strategic position to tie down a place in the market? Any of these 3 approaches may help.
- Go for overall cost leadership: This will demand your business works harder to achieve lowest cost of production and distribution. It is possible to achieve that when you locate work in low cost estates. Automate some aspects of the business. Outsource to reduce overheads and utility. Buy materials on deals, substitute parts or ingredients, and more. When these are done you can price your product and services lower than competitors. Fund-pressed buyers, which form a larger part of every economy, will run to make your product or service a preference especially where you also put in some measure of quality.
- Differentiate your offerings: Stay away from the deep red ocean! It is too bloody. Create a new advantage by developing a highly differentiated product line and marketing program so that your offering comes across as the class leader in the industry. Apple is a blend of art and tech, so it is no IBM; Twitter is no Facebook. It is possible to be loyal to KFC and Buka at the same time. If you create something relevant to keep apart from the crowd, you will attract your own loyalists.
- Pick a segment and focus on it: It is possible to niche. In fact that is the future. If it is still possible to have mass products, then something that works in the 70s would have to make a return. However that is highly unlikely in an environment where the media itself is fragmented, and people show up with different tastes and desires these days. Check one box. Measure the size of a segment if it can be profitable or expanded further. Go for it, understand it, and tailor your offering to it. Mercedes doesn’t sell as much cars as Toyota or Volks but it makes good returns. Amazon started from selling books online. Forbes isn’t Washington Post. It concentrates on people’s wealth.
It is possible to look at your present industry and carve out a niche to serve a peculiar segment.You can also differentiate your products or services by creating benefitial new features or convenient channels to draw a larger following. More, rein in your cost by developing new ways or means to serve your market profitably. Strategically, businesses that adopt any of these strategies will find their place in the market.