Competition Vs. Five Types Of Companies: Definition Of Competition

2.3.1 Definition of competition

Success or failure of a new product is determined by the actions of the company. All companies in any industry operate in environmental, process, managerial, and financial challenges .Some companies have a reputation for being aggressive in the marketplace and attack a new competitor quickly while others take a less-aggressive approach. Companies seek to identify competitors based on strategic forces to discover sources of competitive advantage. Companies seek to identify opportunities and create unique products that allow a price premium. Discovering the competition through the customer’s eyes expands a company’s knowledge and understanding of the customers and the competition. A company that uses customers

They operate in the same industry and are already known and part of a competitor analysis. Marketing manager generally have no trouble identifying direct competitors while the challenge is defining them from the customer’s perspective. For example Colgate and Darlie compete in the same market.

• Indirect Competitors

Customers consider products that solve a problem or meet a need. This means they do not define competitors in terms of the companies in a particular industry. Instead they contemplate options beyond direct competitors. As the options expand, the substitutability of the product also increases. Expanding the numbers of potential competitors based on customers options identify indirect competitors. These competitors offer products that may be substituted based on the customer’s need and choice

What a competitor is saying about its strategy is revealed in annual shareholder reports, 10k report, interviews with analyse, statement by manager, and press release. However, this stated strategy often differs from what the competitor actually is doing. What the competitor is doing is evident in where its cash flow is directed, such as in the following tangible actions, hiring activity, R & D projects, capital investments, promotional campaigns strategic partnerships, mergers and acquisitions.

b) Resources

Knowledge of the competitor's assumptions, objectives, and current strategy is useful in understanding how the competitor might want to respond to a competitive attack. However, its resources and capabilities determine its ability to respond effectively. A competitor capabilities can be analyst according to SWOT analysis. The analysis can be taken further to evaluate the competitor's ability to increase its capabilities in certain areas.

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