Global competition is one of the harsh realities that decision-makers in various organizations are trying to grapple with. In an ever-changing environment with technological leaps, even giants such as Borders, an international book and music retailer, seem to be losing out. Hence, it is of paramount importance that companies come up with “competitive strategies” – a strategy, which takes into account the risks and challenges that competition brings.
Developing a competitive strategy is definitely not an easy target to achieve. One of the main reasons for that is the problem of identifying who really you are competing against. Digital camera manufacturers would have dismissed your thoughts as preposterous if you were to go up to them and state that cell phone manufacturers are your biggest competitors. In order to create such a competitive strategy, I believe the following three points are important.
Even if companies have been in the industry for a long time or they are new entrants, understanding the domain is one of the primary tasks. Once you have a clear understanding of the domain and what your role would be, it then becomes a bit easier to figure out your competition. As mentioned in the “Competitor Analysis” article, you need to perform thorough analysis along various lines such as strategies and objectives, positioning, strengths and weaknesses and the aggression factor to be able to correctly understand competition.
Once you understand the various forces in play, only then can you go about formulating a correct strategy to adhere to. Using various frameworks such as Porter’s Five Forces, SWOT Analysis, etc. you can do a better job of creating a specialized strategy that takes into consideration the competition. Of course, the organization’s leaders still need to come up with answers to where the company will be focusing on i.e. whether they will go for variety-based positioning (special requirement of a wide-range of customers), needs-based positioning (needs of a special segment of customers) or access-based positioning (requirements of a broad-range of customers in a narrow market).
Creating an organization that is easily adaptable to change, keeping in line with the company’s strategy, according to me, is the way the market is shaping up. The strategy is the guiding principle that forms the basis of all the activities the company undertakes. However, it is also a good practice to test and understand how the company and the competitors react to changes – whether environmental or competition driven. The goal of the organization should be to create such an environment where it can easily adapt to the changing climate and still remain focused.
In summary, I believe that the way the industries are shaping up, a competition-focused strategy will prove who survives in the long run. It will be interesting to see if different organizations are able to take up and stick to the market positions their strategy dictates.