Introduction
Throughout their existence, organizations and businesses are considerably pressured to raise their levels of performance and productivity. This is especially so in the modern day business environment which is characterized by aggressive and excessive competition.
Businesses are therefore constantly forced to exhibit innovation and enhanced performance so as to remain relevant and profitable in the ever increasingly competitive arena. To achieve the organizational goals of increased productivity and profitability, many businesses have shifted towards expanding their operations to other regions.
While this is a noble move as well as a strategic one, careful considerations should be made regarding the new market. Without such considerations, businesses are bound to fail in the new markets mainly due to lack of know-how and competition. This paper shall set out to recommend strategies that ‘Teejays’ can implement to ensure that it remain competitive in the Asian market.
Steps to follow in devising a successful competition strategy
According to Kotler (2011) the success of any new or existing company is based on answering the following questions: what does my company have that others in the same industry lack? What extra value do I give to my clients? And; how do I increase this value in years to come? By answering these questions, a company is bound to stay ahead of the game regardless the competition.
However, answering these questions is never enough. You must develop a strategy that ensures that your company places its focus on reinventing itself so as to wade off competition. The following steps may help ‘Teejays’ develop an all-inclusive competition strategy.
Financial perspective
Arguably, this may not be mush of a strategy, but it comes in handy when you need to determine the rate of success to be expected from a new venture. This is especially so since a business that cannot deliver a significant return is never a worthwhile risk.
In this scenario, ‘Teejays’ is getting in a market flooded with companies that offer customer care training and consultancy services. As such, it is important to determine the costs that will be incurred while investing in this market and evaluate those against the expected returns. If the numbers do not add up, then ‘Teejays’ should consider investing in another market.
Market profile
A good competitive strategy should always consider the market environment in which a business is to operate from (Armstrong et al, 2009). In this case, ‘Teejays’ should have a profile detailing the size of the market, the competitors that operate within that market and the stage of growth the market is currently experiencing.
By documenting the size of the market and how competitors are positioned, ‘Teejay’s will be better placed to decide whether to take a profit or a sales maximization strategy. In addition, understanding the stage of growth (introductory, growth, mature or declining stage) being experienced at the target market enables an organization to determine which marketing strategy it can use in order to gain a competitive advantage.
For example, the Asian market is at its mature stage. This means that competition is stiff and the cost of running business is considerably low to the existing competitors. As such, ‘Teejays’ should invest more on advertising (as a marketing strategy) than pricing and sales. This is because, at this stage of growth, the competitors do not advertise as much and focus more on product/service development and sales.
Therefore, advertising is a good way of informing the customers that a new player is in town, all the while detailing the services that a new organization is bringing into the market. In other words, advertising is always a good way to entice consumers into buying your products or services in a new market.
Market segmentation
Arguably, for any competition strategy to be successful, the company must understand how the market works. This concept is quite different from market profiling in the sense that market segmentations explores deeper market dynamics, as well as the forces that influence the success or failure of the market. Market segmentation aims at analyzing the potential and existing problems in the target market.
This can be achieved by talking to different stakeholders (consumers, suppliers and competitors whenever possible) within the market. Alternatively, an organization should conduct thorough research with an aim to uncover different characteristics of the market (Kotler & Armstrong, 2010).
By following these strategies, ‘Teejays’ will be able to uncover such problems and devise viable solutions for the same, consequently allowing the company to beat the competition. In addition, ‘Teejays’ should group its potential clients into manageable segments which share common problems and use its services in the same way.
This will enable it to market to each segment more efficiently, thereby increasing its chance of attracting more clients. This strategy is supported by Kotler and Caslione (2009) who state that total customer satisfaction guarantees success regardless of the existing competition.
Competition analysis
It is always very easy to think that your organization offers the best products and services in the market. This is a slippery slope that most companies (big and small) have failed to recover from. As such, it is always important to consider the existing competition and devise measures to counter their influence in the target market.
As a result, ‘Teejays’ should list all the existing competitors in the market especially those that may have solutions to problems that the company foresees or has. Even if their solutions seems different to what ‘Teejays’ have, they are still a threat and should be watched more carefully.
After listing all competitors, ‘Teejays’ should rate itself and its competitors in regard to pricing policies (operational efficiency), product or service leadership, and commitment to customer satisfaction (customer intimacy). This will enable the company to identify opportunities in the market as well as vulnerabilities.
Make a stand (positioning strategy)
According to Kotler (2011), competitive positioning is all about coming up with a different way of doing business, such that you create value for your targeted market. In this regard, ‘Teejays’ should conduct a SWOT (strength, weakness, opportunity and threat) analysis of its competitors so as to identify and expose their vulnerabilities.
After the SWOT analysis, the company should determine how best they can exploit those vulnerabilities since they present ‘Teejays’ with opportunities to beat the competition. Other than that, ‘Teejays’ should develop a list of products and services that it can bring to the market, in order to meet the specific needs of its prospects and clients in a new and better way.
Value scheme
At the end of it all, you must decide on the type of value you wish to bring to the market. When it becomes evident that you are bringing something different from your competitors into the market, the chances of you getting new clients becomes higher.
Without product/service differentiation it takes more money and time to convince potential as well as existing customers to prefer you over your competitors (Walker, 2003). In most cases, businesses that undermine differentiation often end up competing on price. This is a risky and tough strategy especially if you are in it for the long haul.
There are three types of value that an organization may decide to choose from. The first one is customer intimacy, which focuses on availing to the customer goods and services that are uniquely customized to meet their needs. The second one is product leadership which aims at providing the best products through innovation and product improvement.
Companies that adopt this technique always ensure that they stay ahead of their competition in regard to product/service development. The final type is operational efficiency. This type of value is focused on cost reduction and competes through pricing. Companies following this technique strive hard to ensure that they have the most competitive price in the market.
With this in mind, the best value that ‘Teejays’ can bring to this market is customer intimacy. This is mainly due to the fact that product leadership and operational efficiency are too expensive and risky for a new company in this market. However, customer intimacy will ensure that ‘Teejays’ provide services that meet the clients’ needs thereby increasing its competitive advantage over its competitors.
Discussion
Customer satisfaction often refers to the ability of a product or service to fully satisfy the needs of the intended consumer. This should be the primary concern of any organization willing to survive the aggressive nature of today’s business environment.
This is mainly because satisfied clients mean more sales, increased market share and unwavering consumer loyalty. These elements ensure that an organization makes profits which can be used to research for cheaper and better ways of production, expanding an organization’s market base and expand the business.
In addition, Gilmore (1998) states that customer intimacy is an effective strategy that can be used to minimize negative variations in the production or service delivery processes thereby increasing an organization’s chance of producing quality products and services, which meet (if not exceed) the needs and expectations of the consumers.
The author further states that, in every organization there should be various departments and offices that cater for different needs of the consumers. These factions make up quality chains which depend on each other to produce the final product or service.
Conclusion
Managing the quality levels exhibited by an organization in terms of products, services and processes is seldom an easy undertaking and in many situations, businesses have failed in this regard due to lack of know-how by the business owners. As such, it is always important to ensure that competition strategies are implemented before an organization initiates a project, process or operation.
This paper set out to explore various steps that should be followed to ensure that a new company has the ability to compete effectively in a hostile market. To that end, the concepts of space matrix and competitive strategies have been used to come up with viable measures that can be implemented to guarantee success in the Asian market.
References
Armstrong, G, et al 2009, Marketing: An Introduction, New York, Financial Times Prentice Hall.
Gilmore, H 1998, ‘Product and Service Quality-The South Pacific Way, Fiji Islands: A Case Study’, Quality Engineering, vol. 11, no. 2, pp. 207 – 212.
Kotler, P 2011, Marketing Insights from A to Z: 80 Concepts Every Manager Needs to Know, California, John Wiley and Sons.
Kotler, P & Armstrong, G 2010, Principles of marketing, New York, Pearson.
Kotler, P & Caslione, J 2009, Chaotics: the business of managing and marketing in the age of turbulence, USA, AMACOM Div American Mgmt Assn.
Walker, G 2003, Modern Competitive Strategy, New York, McGraw-Hill International.