Competitor
Competitor is an market entity, which competes with other entities in the market, by providing a more favorable market offer.
All the companies in the market have competitors. Usually the number of competitors depends on the success achieved by the company. The more the company earns, the more it attracts competitors.
Types of competitors
Competitors can be divided into:
- good, who contribute to the development of company, by giving incentives to continuously strive to be the best,
- average, which can be seen as minor inconvenience,
- bad, who cause a lot of problems and initiates unfair competition..
Role of competitors
The company should never ignore its competitors. Most of the time spent on their analysis is not wasted. If company want to be an effective competitor, it should also be an effective partner. It is better to be a partner in a network, and not a single company, because nowadays there is a lot more competition between networks, rather than individual companies. The main motive of inducing customers to choose products or services of company is its individual character that distinguishes it from its competitors.
Ways of dealing with competitors
The best way to overcome market rivals is to attack. If what company produce is not competitive enough, managers should seek another way to acquire customers, by offering additional services, through advertising, packaging, consultations for clients etc.
Competition strategies
Porter defines 3 basic competitive strategies:
- cost minimization,
- differentiation
- concentration.
According to Porter the key to success is to focus efforts of the company to one or two of these strategies. Failures of managers steams from the lack of skills of choice.
Examples of Competitor
- Walmart: Walmart is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores. Walmart is the world's largest company by revenue, as well as the largest private employer in the world with over 2.2 million employees. Walmart has been aggressively competing with other retail stores in the market by offering competitive prices and discounts on products, as well as providing excellent customer service.
- Amazon: Amazon is an American multinational technology company based in Seattle, Washington, that focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence. Amazon is the largest e-commerce marketplace and cloud computing platform in the world, as measured by revenue and market capitalization. Amazon has been competing with other online retailers by offering competitive prices and a wide selection of products.
- Apple: Apple is an American multinational technology company headquartered in Cupertino, California, that designs, develops, and sells consumer electronics, computer software, and online services. Apple has been competing with other tech companies by providing cutting-edge products, innovative designs, and user-friendly features.
Advantages of Competitor
Competitors provide a number of benefits for businesses in the market, such as:
- Increased competition can help to drive down prices and create better value for customers, as businesses are forced to stay competitive in order to remain viable in the market.
- Competition can also spur innovation, as businesses must develop new products and services to remain competitive.
- Competition can also create higher quality products and services, as businesses must meet or exceed the standards set by competitors.
- Competition also benefits consumers, as they can choose from a greater range of products and services at different price points.
- Competition also encourages businesses to create better customer service, as they must differentiate themselves from their competitors.
Limitations of Competitor
Competitor has several limitations:
- Competitor is unable to control the market, as the market is influenced by a variety of external factors, such as government regulations and economic conditions.
- Competitor is limited in its ability to respond to changes in the market, as it must take into account the cost of research and development, production and distribution, and advertising.
- Competitor is limited in its ability to forecast future trends in the market and must rely on market research and analysis to gain an understanding of the market.
- Competitor is limited in its ability to create innovative products and services, as it must take into account the financial cost of developing new products and services.
- Competitor is limited in its ability to differentiate itself from other market entities, as it must face off against established competitors.
- Competitor is limited in its ability to respond to customer needs in a timely manner, as it must take into account the cost of customer service and sales.
One approach related to Competitor is to analyze their current and past market performance. This includes studying their pricing strategy, product offerings, promotional activities, customer service, and other operations. Other approaches that can be used to gain insights into competitors are:
- Benchmarking - This helps to compare a company’s performance against its competitors and industry standards. This allows companies to identify areas of improvement and develop strategies for gaining a competitive edge.
- Competitive intelligence - This involves gathering and analyzing data about competitors, such as their strategies, products, and market share. This helps companies gain insights into their competitors and devise strategies to gain an advantage.
- Market segmentation - This involves dividing the market into different segments, such as customer demographics, needs, and preferences. This helps companies identify areas of opportunity and develop more effective strategies for reaching their target audience.
In summary, analyzing competitor performance and gathering data about them are essential for gaining a competitive edge in the market. Benchmarking, competitive intelligence, and market segmentation are all approaches that can be used to gain insights into competitors and devise strategies to gain a competitive advantage.
| Competitor — recommended articles |
| Competitive rivalry — Competitive environment — Competitive positioning — Gap in the market — Product competitors — Market attractiveness — Competitive position — Potential market — Beachhead market |
References
- Chen, M. J. (1996). Competitor analysis and interfirm rivalry: Toward a theoretical integration. Academy of management review, 21(1), 100-134.
