|
Feb
26
|
The current business environment requires vigilance, strong reactions to external markets and extra product offerings. Gone are the days when business would only focus on the needs of their clients; this approach is no longer viable in the market today. Companies need to keep a close eye on their competitors.
How marketers identify primary competitors
Companies need to identify their competitors through two major perspectives; thy can choose an industrial outlook or alternatively utilize a market approach.
Marketers using the industrial outlook need to realize that all companies providing similar products or services fall in the same categories. Marketers need to ask themselves whether their companies represent the monopolistic structure, oligopolistic structure, monopolistic competition structure or pure competition structures since each of these structures will have different primary competitors. The first structure is made up of only one company providing a particular good or service. Such companies may not need marketers as they dominate the market. Oligopolistic structures may have some competitors in the market but they are fe in number. On the other hand, monopolistic competition applies to those who specialize in certain products. This category has to identify their competitors. Lastly, there is the pure competition structure where all competitors offer the same products. The automobile industry can be classified under the pure competition sector but there may be instances when it also falls under the monopolistic competition structure. (Brown, 1995)
After marketers have determined the kind of structure which they operate in, they now need to look at specific factors that affect their industry in order top identify which competitors are the most important o them. An industry that has low entry barriers and high exit barriers, then it will most likely have numerous competitor who may be struggling to stay afloat. Most of them may be surviving on the basis of covering their operating cots. However, others may have the ability to cover their daily cost and even meet their capital cots too; these are the kinds of competitors that marketers need to watch out for.
Marketers also need to be careful about their cost structures. Companies that seem to have firm control over their cost especially in relation to industry requirements are the primary competitors. Also, if a company operates in an industrial that is largely international, then chances are that the most competitive companies are the ones who have a well established global markets and they qualify as primary competitors. On the other hand, some companies may be operating in industries with high levels of vertical integration. For instance, a company liaises with its suppliers to create a larger market force. Such companies end up dominating the market and therefore qualify s primary competitors. (Hope, 1997)