The future of a company depends on N factors and one of the main ones is related to the company’s ability to create a competitive strategy to outperform competitors. Attract customers it is a great challenge in an increasingly competitive market.
At all times organizations need differentials that favor it in this scenario. Based on a competitive strategy has become mandatory for anyone looking for success. Not only that, the competitive strategy has become a process of survival.
After all, if you are not open to innovation, the tendency is to end up being left behind. This means that it will be surpassed by its competitors and consequently lose space in the market.
But how to create and execute a competitive strategy in your company? In this article we will talk about the importance of:
- Create a rivalry map;
- Identify threats from competitors;
- Overcome the customer’s desire;
- Prepare for new market competition;
- Have varied options of suppliers.
Now just follow through on this article to learn how to apply effective strategies to outperform your competitors effectively.
Competitive strategy: know your role
The competitive strategy is explained as a set of actions that aims to place a particular company at a satisfactory level of competitiveness vis-à-vis its competitors.
Based on these actions, organizations are able to create differentials to support themselves and surpass the companies that are considered rivals. The competitive strategy much more than its competitive character is linked to the future of the organization.
For those who manage to stand out in the market manage the business better, attracting new customers and consequently becoming a quality reference.
>>>We talked about the importance of business management in another article, learn more about the topic clicking here.<<
The administration guru Michael Porter, a reference in competitive strategy, which developed “Porter’s 5 forces” describes the competitive strategy as: “the search for a favorable competitive position in a company, the fundamental arena where competition occurs”.
The advantages of competitive strategy
It is not wrong to say that who does not have a competitive strategy in the market is dead. If you do not have a knowledge of your opponent and if you do not have a broad view of what you are going to face the trend is to lose the battle soon.
Thus, it is essential in the market, with a glimpse into the future, create actions that meet the competitive strategy. Since, the competitive strategy brings numerous advantages to the company. Among them we can highlight:
- Broader knowledge of competitors;
- Neutralization of possible actions by competitors;
- Leadership in production and distribution costs;
- Possibility to surpass competitors with differentials in products / services;
- Balance in quality and cost of products / services.
Porter’s 5 strengths and the importance of competitive strategy
Taking as a reference one of the biggest names in the market, when it comes to competitive strategy, we prepared a list with Porter’s 5 steps to build a model for business positioning and effective analysis in the face of the competition.
Create a rivalry map
Do you know who your direct competitors are, when it comes to companies that negotiate the same product or service as you? Do you know what they charge?
Creating a map of rivalry is one of the essential points in the development of a competitive strategy according to Porter’s forces. Given that have a clear view about your competitors is essential to perform actions that differentiate you from your rivals.
In this sense, you need to close the enclosure as much as possible to delimit these characteristics. Whether analyzing whether you are looking for the same target audience, places of operation and defining your and your competitors’ strengths and weaknesses.
Identifying who competes with you is what makes planning more assertive, so create this map that will guide you in your competitive strategy.
Now that you have an eye on your competitors in the same niche market, it’s time to identify possible threats to your business.
Here you can interpret threats as solutions or differentials that your competitor can offer in return to your company. Anything that it offers that can hinder or remove your company from the competition can be considered a threat.
For example, in the TV market you offer an LED TV, but your competitor offers an LED one with 4k, in which case 4k is a possible threat because it is something different and innovative.
Therefore, it is important to list everything your competitors sell, even if they are products or services similar to yours. Because that way, you can determine what differentials threaten your company to enter the competition.
Thus, it is possible to try to equate your position in the market with some product or feature that makes the fight with the competition equal.
Overcome the customer’s desire
“People don’t know what they want until you show them.” (Steve Jobs)
This phrase co-founder of Apple is perfect to detail this point of Porter’s 5 strengths for competitive strategy.
If the cost benefit in many moments it was the great differential today, it is not only he who will influence a customer to buy a product or not. Quality and other factors are also differentials that add value to what you have to offer.
Once again it’s important to be aware of your competitors and mainly keep an eye on the behavior of its consumers.
Do they value price, ways of payment or value quality? Why have they bought from your competitor and not from you? What’s different about it?
From there the sentence of the Steve Jobs: “People don’t know what they want until you show them.” Be innovative, offer something that exceeds expectations and thus increase the chances of getting ahead of your rivals with your competitive strategy.
Prepare for new competitions
A highlight of Porter’s 5 Forces is in that famous phrase “always be ready for the market”. Being ready means being prepared for new competitions, never settling down and not feeling like you are the supreme in your industry.
You must always be prepared to face new competitions. This means that it is essential that your competitive strategy is changeable and that it helps you to be constantly improving.
It is not possible to stop in time in such a competitive market, new companies appear every day and often with ideas and actions focused on taking the market and surpassing you.
It is important to always have cards up your sleeve and be prepared for new competitions,
Even limiting them to take their place. This happens a lot with companies that close exclusive partnerships with suppliers, preventing a possible competitor from taking its position.
Have supplier options
Making a good impression on customers is a big step towards winning them over. Be it in the sense of selling quality products as well as making deliveries without delay. This whole issue within the competitive strategy planning makes a difference.
That is why, within Porter’s forces, the issue of Providers. Having a limited number of companies that provide services to you offers several risks. Since delays the lack of products.
This problem affects the final consumer who has a high chance of not buying from you and mainly exposing a negative experience on the networks and to people close to them.
Therefore, Porter suggests that a company, when preparing a competitive strategy, has several supplier options so as not to risk being on hand for some problem in the process.
To build your range of supplier options, consider points such as value, product quality, delivery times, etc.
Competitive strategy is essential
The competitive strategy is a planning that is considered essential in the current market. Unfortunately, companies that are not prepared to compete are short-lived. For, in front of several companies, it will be just one more.
Now those who have an effective competitive strategy recognize the importance of knowing who their competitors are and even identify their strengths and weaknesses.
Enabling a broad view of who your direct competitors are, what products or services are threatening you and how to prepare. And when we talk about preparing, it is in the sense of developing actions that differentiate your company from others in the same niche.
Always keep the question in mind: what is different about my competitor? How can I change this scenario and be competitive?
This makes it possible to develop more assertive actions that offer a satisfactory result. So, if you want to be as good or even better than your competitor apply the competitive strategy.
This action will not only help you in this market competition, but it will support your survival, because if you are just one more among several companies that offer the same service you will surely have difficulties to be noticed.
And you, already apply the competitive strategy in your company? Tell us in the comments.