Differentiating strategy to be implemented but how? Is it as easy as it sounds? Then why are the big studios battling against Netflix? What is it that Netflix has that these age old giants are lacking? Why has Spotify revolutionized and become the McDonalds of the music industry? Why does Amazon wish to enter the movie streaming business even though it ranks high as an eCommerce retailer?
Strategy should change as per the changing marketplace, it must adapt dynamically. Companies must understand their competitors as customers can switch easily to better products and services.
In line with the article “Competitor Analysis: Understand Your Opponents” from the Marketer’s toolkit it is imperative to understand the objective of the competitors. They may believe in a different vision and may cater altogether separate customer segments.
Differences in Vision and Objectives:
Apple’s Macintosh laptops with their superior quality and expensive hardware are built to cater to the top tier consumers. On the other hand, Microsoft’s objective is to satisfy a high volume of the middle class population. Apple aims at generating higher profit whereas Microsoft’s aim is to grab as much of the popular demand as it can.
Airline industry and Porter’s Five Forces:
Rivalry among existing competitors is high as major airlines compete closely for global market share and growth. Threat of new entrants is medium as they may be able to secure second hand aircrafts to establish a budget airline. Facilities and route access is difficult because of government and regulatory barriers. Threat of substitutes could also be seen as low with other transportation systems as they do not have the same speed, convenience and flexibility as air travel. Bargaining power of customers is high as the options available are high especially with online applications where a customer can browse many portals before settling for a particular airline with the intention of saving money. Bargaining power of suppliers is high since the two big suppliers: Boeing and Airbus can both satisfy the average airline.
A business can do wonders if it correctly uses this framework and follows adaptive strategies. How will you use this framework to help your business understand the competitive marketplace and gain a strong foothold in the industry?