The Ultimate Business Competition Guide : Reverse Engineer The Competition And Make 'em Eat Your Dust!

Aiden Sisko

• Publisher: JNR Publishing
• ISBN:
  9781311058430
• Topic: Economics
• Subtopic: Sustainable Development
• Index: Economics

(excerpt) If you gain a thorough understanding of the dynamics of competition in your industry, you can easily develop a custom-fit, yet highly effective business strategy by answering one simple question: Are there any obstacles stopping you from doing things, other companies cannot! If you answered “yes” to this question, you are going to find strategizing to be a critical aspect of your business model. Any profits made will be directly related to the level of skill you display in defensive strategy, as well as in your management techniques. Always be prepared to engage in the identification, understanding, anticipation, and influence! Table of Contents
Introductions
Do You Have a Competitive Advantage?
Economies of Scales
Branding
Competitive advantages
Fixing costs across a very wide span to gain competitive advantage
The core elements of efficiency include:
The need for efficiency can be seen clearly in the following:
Optimizations and efficiency
You have to upcharge.
There is expense when differentiation is involved.
Is There Any Individual Firm or Company that is Dominant?
Game Theory: Bargaining and Cooperation Tactics
“The Prisoner’s Dilemma”
Implement Reward Systems
Keep Away From Comparing Products on a Direct Basis
Interact socially in your industry
Develop Perk programs and Loyalty programs for your customers
Developing an industry agreement
Limit the amount of output in the market
Establish your own individual practices in regard to pricing
Pre-emption and Techniques of Entry
Strategies for the Newcomers/Challengers
Create and introduce a clear, easy to comprehend Statement of Intent
Make a decision as to which are of the market you will set your focus on as your main target.
The marketplace industry is, at times, made more difficult by the very presence of incumbents
The higher the number, the more trouble you may have.
Full Speed Ahead or to Proceed With Caution
Strategies for the Incumbent
Be Willing to Reply Appropriately and In Kind
Leave No Stone Unturned, and No Spot Unchecked
Keep extra product on hand, and maintain a large capacity for production
Be clear through the use of the media
Is Your Company the Dominant Entity in the Industry?
When It Comes To Management & Forming Our Competitive Advantage, Are We Giving It All We’ve Got?

Establish your own individual practices in regard to pricing

If industry suppliers lower their prices, everyone must be offered the same price; it may not only be a price available to favored customers or personal friends. This will result in no price cuts being made to gain customers because the move simply will not make sense.

Pre-emption and Techniques of Entry

Most companies compete on price; it is very common in industry. The second most popular form of competition between companies attempting to build a solid customer base involves the decision whether or not the company will begin to compete against new incumbents in the market or introduce an new product market. Production and output levels begin to gain focus in these situations rather than keeping the focus on prices alone, and is also an effective technique.

Here are some common examples in the business market which you may be familiar with:

Kodak entered the photography market, which was controlled by Polaroid at the time. Kodak was eventually ordered to discontinue the production of instant cameras due to patent infringements, and they ended up shelling out nearly $900 million dollars to Polaroid.

In 1985, Rupert Mudoch established a fourth television network in the USA in an effort to compete with stations such as ABC, CBS, and NBC. Murdoch acquired stations and developed FOX broadcasting. While this and its sibling ventures enjoyed some success, they are not as prosperous today as they were in days gone by.

In September of 1992, Kiwi International Airlines began offering commercial flights on only 3 routes. The company filed for bankruptcy a short four years later, with losses extending all the way down to $35 million.

In this specific type of situation, there are a variety of issues that present themselves to both market incumbents and newcomers to the industry, which will need to be resolved through decision making and productive meetings of the minds.

Strategies for the Newcomers/Challengers:

Create and introduce a clear, easy to comprehend Statement of Intent

 providing incumbents with sufficient knowledge that they will be in a battle, of sorts, regarding the market area. Let them know clearly that this is strictly about marketplace share.

Make a decision as to which are of the market you will set your focus on as your main target.

You may decide to go with a niche market, and allow the incumbent the exclusive right of focus over one specific area of the market.

The marketplace industry is, at times, made more difficult by the very presence of incumbents

The higher the number, the more trouble you may have.

The marketplace itself is also harder to defend, with incumbents hitting back with powerful tools of response.

Full Speed Ahead or to Proceed With Caution

in regard to market entrant plans and the plans already set by the incumbents should be a decision made with the knowledge that use of these tactics may generate responses of explosive measures. A non-confrontational affect is vital in building rapport, and being known as one who is honest in the way they conduct business must be seen through actions more than words. Make your decisions wisely keeping all vital points in mind, and always apply wisdom in combination with decision making.

Strategies for the Incumbent

If you are an incumbent, your thinking is more or less based around profits, as well as eliminating any threat that may present itself regarding your proven methods and experience. If you are a newcomer, however, you should be aware of the following techniques, which, when applied with diligence and persistence, have proven to help newcomers gain the experience they so need, as well as better familiarize them with the market they have opted to invest in. The following are strongly suggested if you desire improved profits and company growth at any time during the process of your company duration.

Be Willing to Reply Appropriately and In Kind

o In a nutshell, this means showing a willing attitude regarding the pursuit of a new market entrant and its home markets, if indeed it completes the process. A simple threat made will indeed be the dire end of a business relationship that may have not only made innovative industry changes, but may have changed the face of their market altogether.

Leave No Stone Unturned, and No Spot Unchecked

o Whatever product or service you are offering, make sure you have a firm understanding of the supply and demand not only in your initial area, but also in any area you are considering expansion in. Check out all the competition in that area, existent and potential, and plan accordingly using strong strategy that has a foundation on patience and wisdom. It can be very unwise to attempt a complete takeover of any market area.

Keep extra product on hand, and maintain a large capacity for production

o If falling prices end up motivating consumers off the cuff, you need to have your team ready to fill the need. While many companies tend to underestimate the potential of the market, the wisest move you can make in this area for the benefit of your company is to keep extra product on hand and ready to go. It will pay off surprisingly well in the end.

Be clear through the use of the media

Make public statements regarding your intention to resist any other firm’s attempt to elbow their way into your market niche. In a perfect world, these statements would be nothing more than mere intimidation, but in the case that one were to actually bring the threats to fruition, it is vital that your firm be prepared to protect itself and its clients and their assets at all costs.

Construct a strong, energetic corporate culture that exudes a viable drive which is apparent in your improvement. Form a foundation which is built on integrity and a heartfelt desire to do the best thing for the consumer. When you honestly apply these principals to all areas of your life and business, success is inevitable, as your integrity will show through the business you do.

Is Your Company the Dominant Entity in the Industry?

There are three questions that need to be asked when assessing the competitive advantage possessed by your own firm. They are as follows:

1. Does our company or any of our direct competitors offer benefits and products that consist of state of the art technology? How about customers that are held captive by years of loyalty? Anything else, such as economies of scale that are presenting difficult hurdles? How about products or services that are not available through anyone else in the industry?

2. Identify the market your company is truly in, and by doing this you will be able to identify your real competitors in the market.

3. Has your company or any of its regular direct competitors benefited from an above average market share? Has the benefit seemed to last for an extended period of time?

When you answer these questions honestly on behalf of your firm, you will be able to tell whether or not you hold the competitive advantage in your industry. With this knowledge you have something you can form a solid business strategy around. This will enable you to work up a competitive advantage while keeping your business rolling as smoothly and efficiently as possible. Take the following tests to gain a better understanding of where your business stands in each area:

Test #1:

Q. What markets is this company in, and who are we competing with in each market?

A. It is necessary for you to create a map of the industry you are in which is clear regarding the structure and dynamics of your competition that directly affect your market. Sort out the both the starting and ending point for the market, and pinpoint exactly where your company sits in the industry as a whole. If you happen to notice a company name that seems to appear often in the company segments, these segments should be treated as one individual market to itself.

Test #2:

Q. Does our company or any of its direct competition possess anything such as “captive customers”, exclusive technology, economies of scale, or any other benefit that is not available to any other company in the industry?

A. If the market is showing profits and...

Table of contents

• Introductions
• Do You Have a Competitive Advantage?
• Economies of Scales
• Branding
• Competitive advantages
• Fixing costs across a very wide span to gain competitive advantage
• Optimizations and efficiency
• You have to upcharge.
• There is expense when differentiation is involved.
• Game Theory: Bargaining and Cooperation Tactics
• Implement Reward Systems
• Keep Away From Comparing Products on a Direct Basis
• Develop Perk programs and Loyalty programs for your customers
• Developing an  industry agreement
• Limit the amount of output in the market
• Pre-emption and Techniques of Entry
• Strategies for the Incumbent
• Be Willing to Reply Appropriately and In Kind
• Leave No Stone Unturned, and No Spot Unchecked
• Keep extra product on hand, and maintain a large capacity for production
• Be clear through the use of the media