Staying safe around major competitors

 Business competition has never been a safe journey; you are jolted by one or other incident that can turn out to be too nasty for you. This is especially true when the strongest competitor in your industry turns his glance over you. He is a typical bear who wants a prey for his dinner. What you can do? 

When I looked at the US National Park Service, I picked up very interesting facts about bears. Most of these are equally true in the case of competitors as well. Let me outline few highlights of staying safe around competitors who exhibit bearish qualities. 

Characteristics 

1. Bears are wild and dangerous so are the business competitors whose conduct cannot be predicted accurately. Bears like to listen to human voice that is slow and appears like coming from beneath the earth. Competitors would also listen to you if you are willing to engage with them on the platform of compromise and conciliation rather than confrontation. No sooner than you signal your comradery intention they change track

2. Most of the time standing bear is, in fact, curious yet not threatening. Bears do charge but change course and urn away from you and proceed their normal saunter. Similarly competitors who appear as menacing at the first sight might use this as a bluff and are ready and willing to engage you in friendly terms.

Approach

1. First thing you should learn about facing bears is there is no time tested and uniform tactics. Same applies in the area of business competition, where there is no uniform business manoeuvre. Everything depends on the circumstances and the position of you vis-à-vis your competitor

2. If you feel that you are much weaker than the opponent it would be better for you to keep a safe distance from him and always remain outside his loop by not coming into direct contact with him or his partners

3. Never surprise a bear. Let that sink in your mind that in business competition too, this adage holds sway. A surprised opponent is a wounded bear and could wreak destruction over you, resulting in your total collapse

4. If you see that the opponent is going to pursue you till end then check up this business manoeuvre. Climb to higher elevation or moral high ground and then accentuate yourself appear larger than you actually are, to convey to the competitor a stark warning that you are not alone and where the need arises you can marshal the support of your associates in a final battle!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

 

Facts about strategy formulation you would not have learnt

Corporate management spend quite a lot of time on crafting useful business strategy. In doing so it undoubtedly dwells on analysing the external environment. Strategy formulation follows as the next logical step only if the assessment is thorough, impartial and objective, as this blog post illustrates: 

Understanding external environment mandates that company looks at the players as well as the elements prevailing in the market. How the overall industry behaves is only one part of the assessment, the vital other part is how the market leader conducts his business. How he foresees trends and discernible changes that would break out in near future. Would these changes impact the present state of affairs positively or negatively under normal conditions?

Equally important, is the elements that play out in the market at the present moment and in the foreseeable future. Amongst many of these elements, the following stand out in terms of significance and overall impact: 

a) Social dynamics and demographic structure cast a spell over buying patterns within a market

b) Technology used at present and innovations that are likely to take place in future. Whether these innovations could be disruptive to existing players

c) Size of the market and how the likely growth under normal circumstances compares with the aftermath of major innovations hitting the market

d) How the capacity of the existing players would function? Will there be appreciable changes in enhancing booked capacity and/or utilization level of overall capacity. Put differently, will there be a state of excess capacity that could drag down the efficiency of the players

e) Finally, in the downstream, how the barriers of entry works to stop unwanted new entrant flooding the market with cheap goods, becomes major challenge. The path ahead is rosy or not depends on the interplay between the current participants in the market and the potential new entrants into the market.

 

Cheers! 

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

 

 

Focused differentiation good for wine industry

Concentrating on a narrow market range with higher price and of course with a solid product is a high stake  game only the brave can take on. But that is where traditional and long lasting wine companies must move on in the wake of upstart firms flooding their non-premium product into the European market. And this business manoeuvre is called focused differentiation.

For the focused differentiation business manoeuvre to work a company must not only have a history behind it but an untarnished reputation as a provider of quality product or services. The big question is why then a company must think of focused differentiation in the first place. The answer lies in the fact that the barriers of entry into most products are negligent or in most cases non-existent. This allows many second rated firms to enter into market and challenge the established companies in their own domain.

A good example is the European wine industry. For a long time wine was produced and mostly sold in the European market because drinking wine is undoubtedly a European custom. Of late, wineries from Australia, New Zealand and many of the Latin American countries have got into the fray and like wolves on the gate prey on the sophisticated in Europe with their non-premium products.

To be sure, European wine companies can fight back as they have the essentials with them. One is their target market is segmented to such extent that vintage wine is readily sought after by consumers within. Secondly wine connoisseurs typically consider only the vintage produced from Bordeaux, Champagne, Burgundy and many other European vineries as premium ones.

What these companies must do is to identify newer target markets segmented on the basis of taste, culture and income bracket. Having done that, companies must improve the target market by building up close relationship with consumers in that segment. Much hope must be placed on the dynamics of this target segment and companies must use their capacity and capability to sell their time tested brands and leave the rest to the rest.

Risks are manageable too. Despite their higher cost pf production, vintage brands built on solid ground in terms of acceptance by consumers command higher prices. This leads inexorably to the fact that the standards of wine set in European markets must never be diluted. For this to happen authorities must be persuaded to bring in suitable rules and regulations regarding entry of non-premium wine being sold as premium ones.

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

 

 

Why business needs broad differentiation?

 Facing stiff competition in the market place could be lot more easier if firms perch on an appropriate business manoeuvre that gives optimum results but not maximum results. One such manoeuvre is known as broad differentiation. Here is a preview:

Simply put broad differentiation seeks to highlight the company’s ability to differentiate on the basis of brand name under which it sells its product ensemble from the rivals in the market. Undoubtedly such a business manoeuvre must appeal to wider public who form the bulk of non-segmented market anywhere. There are two aspects: one is the acceptance of the company and its products as representing excellent value proposition that buyers indeed search for. Secondly the price quoted for the line products is equated to value delivered.

To be sure, there must be a well of loyalty towards the firm in the first place followed by the undisputed trust for the products it sells. That brings about the customer acceptance and the willingness to translate it into purchasing patterns. For example repeat purchase of single product and/or line of products of the company. Fundamentally this results in more sales for the company and signals that the premium price charged by the company is indeed, tenable. 

Broad differentiation is actualized in different angles, all of these add-up ultimately, to the value proposition. Examples include, unique features in design, user friendliness, assured reliability and needless to say superior after sales service.

In a specific market where rivals do not have similar product or product that does not have the full complement of the features, the firm enjoys first mover advantages. Having said that, over the period of time rivals can catch up with features and come up with an equal or somewhat superior product. Therefore the critical matter is the firm to continue unabated the path to innovate and spend whale of money in research and development and keep abreast of the trends and fashions in the market.

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist

 

 

Create something from nothing

“Make believe” is a business manoeuvre that can be practised by new entrant to the market or a medium company facing a giant in business competition. The central theme here is to simulate an illusory idea and introduce it into the enemy quarter and allow him to wonder what all is about.

One good example of this business manoeuvre is to spread false info that a takeover bid is eminent over the strong enemy by a consortium of firms whose identity is not disclosed.  The idea here is to sell a lie as truth. The falsehood is repeated 3 or 4 times without any effort to actualize the takeover. At this moment, enemy considers that it is plain rumour or fake news and go about his normal routine as if nothing happened and nothing would happen in the near future. 

The theorem “create something from nothing” is the seventh one in the Chinese “36 stratagem” that discusses how to fight an enemy using an intrigue and simulate it as truth so that enemy believes it is serious initially, and when nothing further happens after few occasions, lowers his guard and concentrates elsewhere. Following a pattern of false-false-false suddenly it becomes true. Now the takeover bid is done at such speed that the target firm has no wherewithal to fight back.  Most InfoTech companies are taken over or acquired by this process.

In Chinese folk lore there is an incident that is celebrated giving rise to this stratagem. In 756 AD, General Ling Hu Chao of the Qin state attacked Yongqui that resulted in Qin state exhausting all its arrows. General Chang Sun defending the fortress found two imperatives: one he need to replenish lost arrows secondly he need to contrive a manoeuvre to defeat the invaders. So he ordered his men to lower straw mannequins in front of the Qin army few times.

Consequently Qin army fired several volleys of arrows. After lowering 3 straw mannequins General Sun got enough arrows. By this time General Chao of Qin state, thought there is no point raining down arrows. When the fourth straw mannequin was lowered he ignored at his peril. In fact the fourth time, it was highly trained warriors who emerged from the mannequin and made short work of the Qin Army in no time!

 

Cheers! 

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist