Why competition is of vital interest to a Firm?

It was Sun Tzu who said “War is a matter of vital importance to the State: the province of life and death; the road to survival or ruin.  It is mandatory that it be thoroughly studied.” In business strategy we have the same connotation. But instead of war we have competition.

Paraphrasing Su Tzu we can equip” Competition is a matter of vital importance to the firm; the province of life and death; the road to survival or ruin.  It is mandatory that it be thoroughly studied.”

In studying competition we have three inter-related aspects: market, customers and product. All three need constant and careful attention. A robust business strategy must be able to balance all three to gain what we call “competitive advantage”.

Understanding market is the first step. What market needs right now must be explored with details. Before thinking about what product to produce firm  must perch on what product market needs, quality and standards the market is looking for and the price that could likely prevail. This is basically market driven approach. When a firm has already decided on a particular product, then it must assess likely demand and if such demand is less than expected must go on creating the need for that product by way of educating and explaining. This is product driven approach.

Every business competes to get the customers. Capturing customer is one thing and retaining them is another. In fact business failures occur where firms are unable to retain their customer base. Just having a customer base is not enough. The customers must be persuaded to go for repeat purchases. Firm should begin with finding buying habits of the customers: what they buy when they buy and what quantity. Firm needs also to connect with them and continue to be in touch with them.

Finally a firm must be armed with the right product to make test marketing as the first salvo followed by aggressive campaign to take it upward. Another business tactics is to go for marketing blitz at first and follow up with focussed persuasion on selective targets by creating dealership or alliances with other firms who stand to benefit by selling the firm’s product to their own customers. Whatever it is unless the product is of absolute value proposition that is unshakable and that cannot be duplicated by competitors in near term the marketing campaign would end in a whimper rather than a bang!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist