Introduction
Competitive advantage is what sets an
organization apart; its competitive edge. But as one organization attempts to
develop competitive advantage, other organizations are also doing so. And an
organization's competitive advantage can be eroded easily and quickly by
competitors' imitations. Competition is everywhere. Some have described today's
business climate as one of hyper competition, which is a situation with very
intense and continually increasing levels of competition.
Competition is organizations fighting for
the same desired object or outcome-typically customers, market share, survey
ranking, or needed resources. Among other things, the intensity of competition
is going to vary depending on economic supply and demand.
Who are an organization's competitors? One
approach could be to use an industry perspective or a marketing perspective.
The industry perspective identifies competitors as organizations that are making
the same product or service. The marketing perspective identifies competitors,
as organizations that satisfy the same customer need. Another approach to
identifying competitors is to look at strategic group, which is a group of
companies essentially following the same strategy in a particular market or
industry. Within a single industry, you might find few or several strategic
groups depending on which strategic factors are important to different groups of
customers. Some possible strategic dimensions for identifying strategic groups
include price, quality, level of vertical integration, geographic scope, market
share, profits, and so forth.
