HOW TO GAIN A COMPETITIVE EDGE
Examine your business and its key operations, policies and relationships with customers to determine what you should work on to compete more effectively. What You Should Know Before Getting Started
Gaining a Competitive Advantage
Company Resources and Opportunities
Evaluation of Opportunities
Defining the Process
Choosing a Competitive Edge
What To Expect
This Business Builder will help you to become more competitive by identifying the features of your operation you should focus on to maximize your efficiency and your product's appeal.
What You Should Know Before Getting Started
By accurately identifying and analyzing your firm's target market and its relative competition, you may recognize potential opportunities for success in selling your product or service. These opportunities, which your competitors may have overlooked, will provide your firm with the vision to develop marketing mixes far superior to your competition.
To ensure your firm's market staying power and survival in today's marketplace, it is important for you to gain and maintain a competitive differential advantage in your target market.
The state of the economy has a profound impact on your customers' buying habits. Twenty-first century customers have become more concerned with repaying their debts, lowering capital expenditures, and reducing costs by concentrating on products or services that satisfy their basic needs. Although not willing to lower their standards, both individuals and corporations are more selective in identifying products or services to satisfy their needs.
Before getting started you will need to familiarize yourself with some basic terminology as it relates to customers and their markets.
The First Step Is To Analyze Your Competition. What type of competition exists in your target market, and what impact will it have on the firm's ability to gain a competitive edge?
The uniqueness of your firm's product or service, the number of competitors, the size of your competitors, the overall demand and the price will all be key factors in your gaining the competitive edge.
There are four basic forms of competitive structures that differ based upon the number of competitors, relative ease of market entry, types of products and knowledge of the market. These structures are defined as follows: 1. Monopoly.
A firm that produces a product or service with few or no substitute products or services. The company that has absolute control over the price in the market is considered a monopoly. An example would be your local utility companies. 2. Oligopoly.
This structure exists when a few sellers of products or services control the supply of a large proportion of your market. These firms tend to set similar prices and create more difficult barriers for entry into the market. The steel industry is a classic example of an oligopoly.
3. Monopolistic Competition.
This structure consists of many firms with moderate barriers to entry. Firms competing in this market attempt to develop differentiated market strategies to establish their own market share. Firms selling software products would fall into this category.
4. Perfect Competition.
Highlighted by unlimited competition and hardly any barriers to entry, individual firms operating under this structure would be unable to influence the price or supply of a particular product or service. Agricultural products are the closest form of pure or perfect competition.
Let's look at the chart below to help identify the characteristics of each type of competitor.
No. Of CompetitorsNoneFewQuite a fewMany
Size Of CompetitorsN/ALargeMiddlingSmall