All the competitive advantages we’ve been pursuing during our careers are gone. That’s right. it’s almost impossible to sustain an advantage based on intellectual ideas. We need to learn the art of Competitive Strategy to sustain a competitive advantage. This is a hot topic for the season
"*Understanding the Art of Competitive Strategy****
Today we live in a very competitive world, not just that it is a fast paced world and makes competition even more hostile.
Competition is all around us and it exist because of finite resources available
If there are infinite amount of resources, competition might be reduced.
Since we live in a world of greed, some folks will however still create competition out of enormous resources.
In one way or the other we engaged in competition in our daily lives
We find ourselves in situations and how we make the best use of those situations depends on the strategies we deploy.
Free image frompexels
An art is best learnt with practice, an everyday apppraoch in viewing competition will be of great use when applying to our businesses, careers and personal lives.
As much as companies can be in competition, humans can be in competition against humans, and humans can be in competition against ideologies.
The first Trillion dollar company was not in existence 100years ago, a lot of technology giants that we see today were non existent 30 years ago
However, these industry has sent some other industries that predated them into oblivion
To be relevant in competition, it's highly important to understand your
- Industry
Knowledge cannot be overemphasized when it comes to competition, I am mindful of restricting the discussion to businesses and companies since competition is a part of our daily lives.
Whether you're in active competition or not, you have active competitors
I've heard some young business owners say they do not have any competitors at all, it's a common buzz word in the tech industry, they believe their product is the first of its kind, this is usually untrue.
There are competitors everywhere, it's your choice to be active in the competition on not. It is essentially a battle to win, and the leaders do not slow down.
It's important to know the core of your industry. As a job seeker in Nigeria, an average knowledge of your industry might not be significantly helpful to get a good job. I'm aware a lot of youth are underemployed for different reasons. High level knowledge of your industry can be a game changer. - Competitors -
Your competitors might not even be in your industry, they might be in an alternate industry.
They might not produce the same services or products that you offer.
They might just offer substitutes.
Remember that, usually, competition is borne out of scarcity of resources . So competitors begin to fight for the limited resources available. And this creates what Chan Kim and Renée Mauborgne describe as "Red Ocean"
Where everyone is trying to outperform the other in an industry
And in turn results into a value-cost trade off where competitors begin to offer reasonably lesser values in contrast with the costs.
This usually reduces profit margins as costs are raised.
For example, the biggest competitor against Coca-Cola might essentially not be Pepsi
Pepsi is a direct competitor as much as pure water is.
Pure water is a substitute, it's cheaper too, and it's sugar free usually 😆
A professor of Harvard designed a strategic model that analyses the 5 competitor forces that shape strategy. Most businesses are usually concerned about One of the forces, or at most 2.
While designing a model for your business, there is a block for Key Partners and these category of people are of importance if you'll be beating competition at all
The 5 Forces also know as Porter's 5 Forces are namely-
image credit
Competitive Rivalry - Jumia sees Konga as rival
Buyer Power - ability of buyers to drive down prices
Supplier Power - ability of your suppliers to influence prices
Threat of Substitution - how easy your costumers can find a different way of doing what you do for them
Threat of New Entry - how new entrants can affect your position in the market
In beating the competition, effective strategy have to be deployed considering the 5 forces that can influence competition
The cornerstone of creating an effective competition is Innovation
Without Innovation, you'll soon be out of favour with your Key Partners, (these includes Supplies, Buyers, Employers, Staff).
Without innovation, your industry competitors may find no use for you since the better alternatives and substitutes.
Innovation helps you determine your Unique selling point
You always do not have to go into a loss or make management decisions detrimental to the health of your company or career to please key partners
Sometimes it might not be about reducing the cost of your commodity and drop some value
An example of a supermarket that had 2 branches A and B
A is located in the most populated area of the city
B is located in a much less populated area of the city
The management found B to make more revenue than A
Naturally A should generate more revenue, right?
The difference was that B was located in front of a major turning to allow patrons turn easily into the supermarket and park. Also it was the only supermarket with such convenience within a 2km radius.
Innovation can be as simple as this
- Customers
free image from pexel
Know exactly what the customer wants.
Many times we work based on assumptions and try to validate our plan with that.
This is not a wise business decision many times, it pays to do due diligence on the particular needs of the customer.
There might be things that your industry players have offered for years and paid much attention to, the specific needs could have changed over time, this is what you need to find out.
Find out what appeals to your buyers emotionally and functionally
What appeals to iPhone users may not appeal to Android phone users
While some will go any length to get an iPhone, some just want a Techno phone with 10,000MAh
They are in the same industry, different appeal to buyers
What appeals to a. Mercedes Benz user clearly doesn't appeal to a Toyota user
Whole creating a strategy keep.
Discover the most important needs of customers and reconstruct a market boundary
Reach beyond the current demand, this allows you innovate more
- Focus on a big picture, with some trajectory into time
- Overcome organisational hurdles
Today we know our competitors, we cannot tell what the competitor would be tomorrow
In the near future, we might begin to have a different face to competition with the rate of technological advancements.
Robots will make things easier in the future, they'll steal many jobs too.
Well, the robot is not the competition, the man who created the 'brain' for the robot is. You may have to change your competition and get in with him. Thanks for reading, PLEASE
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