Competing effectively – How to identify your true competitors?

23 Mar, 2023 - 11:03 0 Views
Competing effectively – How to identify your true competitors? Michelle Nonkazimulo Ndiweni

The Chronicle

NO business operates in a vacuum and, therefore, it is important to know your competitors and thus, make profitable strategic decisions. As much as companies can all attempt to meet a certain consumer need, they do not all compete for the same consumer.

For instance, all mobile phone manufacturers seek to meet the consumer’s need to communicate. Not all of them are competing for the same consumer. Loosely put, Apple’s consumer is not iTel’s consumer, similarly, neither is Ferrari’s consumer Toyota’s consumer.

As economists suggest, all resources are scarce and thus should be used efficiently as possible. This includes the financial resource. Imagine a scenario where Ferrari uses its scarce financial resource to fight off competition from Toyota, then at the same time Porsche (a direct competitor) launches an attack while it’s still trying to battle with Toyota, would that yield much fruit? – Certainly not, strategically, that would be deemed a misuse of resources.

What does this mean? Well, you should compete with companies in the same ‘strategic group’ as you. Strategic groups are basically companies operating within the same industry, pursuing equivalent strategies and targeting groups of customers with similar profiles. Companies in the same strategic group as yours are those following strategies similar to yours and facing similar strategic questions. These companies are targeting similar markets as yours.

These are the companies you are directly competing with. These are the companies you need to seriously keep an eye on, concentrate your analysis on them and examine them in detail. These are the companies who are wanting to grab a portion of your market share.

Why should you concentrate primarily on companies within your strategic group? Well, as we already discussed, your resources are too few. It doesn’t make strategic sense to stretch them too thin as you would probably compete ineffectively and risk losing market share. You’d rather stay informed on the companies that are not within your strategic group but have details on companies within your strategic group.

Staying focused on the companies within your strategic group certainly doesn’t mean you ought to forget about those, which aren’t in your strategic group. Whether they are operating in a market perceived better than yours or your market is better than theirs, they could be aiming for a share of your market.

Take time to get informed of their plans. Although of course, much of your time should be invested in companies within your strategic group.

So, in short, to compete effectively, examine the companies within your strategic group in detail. Invest much of your resources competing with companies in your strategic group. To avoid surprises, make sure to remain adequately informed of companies outside your strategic group.

Mrs. Michelle Nonkazimul Ndiweni holds a Master of Science Degree in Marketing and is a lecturer at a local university in Zimbabwe. She is a marketing consultant, researcher and trainer and may be contacted on the following profile on LinkedIn,

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