FREE online courses on Competitive Strategies - A Model of
Competitive Rivalry - Questions
There are several key questions to ask
before we can identify and understand our competitors as given below:
- What are the major competitors' strengths?
- What are the major competitors' weaknesses?
- What are the major competitors' objectives and strategies?
- How will the major competitors most likely respond to current
economic, social, cultural, demographic, geographic, political, governmental,
technological, and competitive trends affecting our industry?
- How vulnerable are the major competitors to our alternative
company strategies?
- How vulnerable are our alternative strategies to successful
counterattack by our major competitors?
- How are our products or services positioned relative to major
competitors?
- To what extent are new companies entering and old companies
leaving this industry?
- What key factors have resulted in our present competitive
position in this industry?
- How have the sales and profit rankings of major competitors in
the industry changed over recent years?
Why have these rankings changed that way?
- What is the nature of supplier and distributor relationships in
this industry?
- To what extent could substitute products or services is a threat
to competitors in this industry?
No matter how we define our competitors, the
fact remains that there are other organizations working hard to secure
customers, resources, and other desired outcomes. Each of these organizations
has resources and capabilities it's attempting to exploit.
The question is what makes some
organizations more successful than others? Every organization has resources and
work systems/processes to do whatever it's in business to do. However, not every
organization is able to effectively exploit the resources or capabilities it has
or to obtain the resources or capabilities it needs but doesn't have.
Organisations will develop strategies to exploit their current resources and
capabilities or to vie for needed-but-not-owned resources and capabilities in
order to pursue and attain desired outcomes such as customers, market share,
resources, and so forth. As organizations strive for a sustainable competitive
advantage, the stage for competition is set.
In attempting to create a sustainable
competitive advantage, organizations are looking for ways to set themselves
apart. They do this through their choice of competitive strategy-that is, the
choice of how an organization or business unit is going to compete in its
particular industry or market.
What is the choice of competitive strategy
based on? It's based on the competitive advantage(s) that the organization has
been able to develop. As an organization refines and sharpens its sustainable
competitive advantage (whether found in resources, capabilities, or core
competencies), the basis for the competitive strategy is established.
