The first step is to define the competition, who are the competitors.
On this scale then there are some questions that define the directness of the competition:
Generic competition
1) What products or services offer the satisfaction of the same need?
Eg Need for transportation. Competitors: bus, car, motorcycle, bicycle, train, subway, etc.
Industry competition
2) What products or services offer the satisfaction of a need at a low cost and in a standard way?
Eg the need for public transport. Competitors: bus, subway, train.
Brand competition
3) What brand provides the same satisfaction at the same cost and in the same way?
Eg. Need for collective transport: “Bus” transport company, “Colexpress” transport company, “Minicolectivo” transport company.
This type of analysis is essential to be able to detect the strengths, opportunities, weaknesses and threats of the company and of its competitors and to emphasize its own competitive advantages that stand out from the rest.
It is also very important to be vigilant and well positioned in the market to avoid internal destabilization in the face of competition. Based on this, it is necessary to have predesigned actions to attack the following challengers:
a) Action of existing competitors These are those who sell products and services similar to those of the company.
b) Action of potential competitors (threat of new competitors) Potentially competitive companies can be detected depending on whether they have certain advantages or competitive facilities, to enter the market.
c) Threats of possible substitute products or services. Substitute products are those that fulfill the same function for the same group of buyers, even if they originate from a different technology.
This type of threat is aggravated in sectors of rapid technological change or of easy change in the value for money.
I add one more action in Argentina that is fundamental in the country where we develop:
d) Political action and threat from foreign markets In Argentina, regulated policy can cause damage to companies in the matter of price controls or benefits of subsidies to competing companies generically, and in turn, it is a country very sensitive to what What happens in external markets due to internal economic vulnerability.
Based on what is expressed in this report, it is very important to avoid the phrases: “my company has no competitors”, “nobody does what I do” or “we are the only ones who can develop these products or services”. I am in a position to say that there are no private monopolistic companies in Argentina that offer a satisfaction to a need that cannot be satisfied in any other way (except for public companies that by exclusivity law are monopolistic), and if I am wrong and this It happens, the company must be much more attentive than if there are competitors because if they are the only ones then they become direct entry of new competitors due to the great business opportunity.
Being prepared is the best strategy, strengthening the internal weaknesses of the company and capturing external market opportunities is the way to overcome competitive threats and economic crises.
