COMPETITION
- basic principles for marketing and business students
.
Updated 2013 Oct 01
 
Competition
Competitor Intelligence  witiger.com/ecommerce/competitorintelligence.htm
Competition witiger.com/ecommerce/competition.htm
Competition Types witiger.com/marketing/typesofcompetition.htm
Cannibilization witiger.com/ecommerce/cannibalization.htm
le
.
INTRODUCTION This unit on basic principles of Competition is designed for students in 1st and 2nd semester college students in business and marketing courses. 

The Competitive Environment is, perhaps, the most important of the 6 Environments that influence a company involved in marketing, business,  international business or e-commerce. 

The degree to which one attends to the "other" environments is a consequence of the intensity of the Competitive Environment.

.
v
Competitive Environment
If the Competitive Environment is intense, it means you have a lot of companies carrying out strategies such as 
  • copying your product and knocking off your designs,
  • selling below your price, 
  • using some of your advertising themes and concepts
  • paying better wages to employees,
  • sell a slightly different product that can be substituted for your's,


therefore it will be necessary to

  • utilize every resource in the technological environment, 
  • attend to all the language and gender and age considerations of the social/cultural environment 
  • carefully analyze trends in the economic environment
  • monitor political movements and upcoming changes in the regulatory environment
  • prepare contingencies for threats from weather extremes and  the geographic environment,
e
Competitive Environment
.. if the Competitive Environment is NOT intense

then 

  • you don't have to use the latest technology, because your customers will not be drawn to anybody else, and you can therefore save money
  • you do not have to worry about paying money for having marketing material translated into different languages for the Social/Cultural Environment
  • you can charge a higher price because whether the Economy is good, or bad, does not matter - absence of competition mean that if people want your product, they have to buy it from you and pay whatever price you charge
  • you do not have to monitor changes to laws and regulations in such a detailed  way and can probably save money on legal fees
  • you do not have to watch for weather or climatic problems cause if they do delay your shipping or sales, it doesn't matter cause customers can't buy from other suppliers anyways
e
Competitor 
Intelligence

Who?

Key
Points
Why is it important to know who your competitors are?

You might think it is obvious - "People who sell the same stuff as us"
- but in reality, the question is quite complicated

If you do NOT know who your competitors are, then you will not be able to comprehensively gather the required Competitor Intelligence in order to develop appropriate Plans, Strategies and Tactics to allow you to meet your firm's marketing Objectives.

Secondly, if you do not know who your competitors are, you cannot do a complete SWOT analysis which requires you to identify "Threats".

WTGR

.
who is a competitor?
http://dialspace.dial.pipex.com/aware/competitor-analysis.shtml

Business competitors are:

  • Other organizations offering the same product or service now 
  • Other organizations offering similar products or services now 
  • Other organizations offering a variation on a product or service, that you cannot
    • which could be because 3rd party vendors make accessory items, or "apps" for you, or your competition
    • which could be because you did not update your software to follow trends
  • Organizations that could offer the same or similar products or services in the future 
  • Organizations that could remove the need for a product or service we sell
.xx
Competitors
are ....
Other organizations offering the same product or service now
     
    image comes from http://pendletonpanther.wordpress.com/2009/02/04/any-real-difference-between-coke-and-pepsi/ obvious
.
Competitors
are ....
Other organizations offering similar products or services now 
 
- also somewhat obvious

- in this example, Snapple is competition for Coke in the category of "refreshing drinks", but not competition in the category of "carbonated cola drinks"

however, as the social-cultural environment changes, the segment for carbonated cola drinks may decline as alternatives become known among other variations of beverages - as in the case of how ice tea became popular in the 1990's.

Student Terry C. in MGD415 at UTM in Jan 2011 emailed to say "I did some research and found  out that in June, last year (2010), Coca-Cola announced a 20-year deal to buy  the distribution rights to Dr Pepper Snapple Group. From what I have  found out, Snapple is one of the brands listed under the Dr Pepper  Snapple Group....I should change my wording on what I have said earlier bout Coke  buying Snapple. Essentially, Coca-Cola is paying the rights to  distribute the Dr Pepper Snapple brands . I see this as part of their  tactics to keep up with their rivals in this competitive beverage  environment. "
.
Competitors
are ....
Other organizations offering a variation on a product or service, that you cannot
PC World Magazine journalist Daniel Ionescu reported Oct 5th 2009 that Adobe announced that Flash Player 10.1 will be available by the end of the year on BlackBerry, WinMo, Palm WebOS, Google Android, and Symbian phones.

Ionescu explained that "... millions of iPhone users out there are left fuming over the announcement because their beloved gadget isn't showing any signs of Adobe Flash adoption."
see  www.pcworld.com/article/173092/
3_reasons_why_iphone_wont_get_adobe_flash.html

Apple has been enjoying good sales because there are not many smart phones directly competing "feature for feature", however if the other smartphones get Flash, and Apple doesn't, it is potentially a bad situation for Apple.

Older examples of this can be found in the car manufacturers
eg. Ford selling their F350 with 4x4 wheel drive and no extended cab and double rear wheels
     
.
Competitors
are ....
Other organizations offering a variation on a product or service, that you cannot
    • which could be because 3rd party vendors make accessory items, or "apps" for you, or your competition
graphic When Blackberry first started selling smartphones it did not consider Apple a direct competitor in the beginning because Blackberry had BBM and other things which they thought made for a more attractive product.
As iPhone became more popular among MAC users, and then the general public, it was followed by thousands of developers making "apps".

Unfortunately for R.I.M., most of the app developers only made an app which could be run on iPhone, or iPhones and Android, leaving Blackberry users without these particular opportunities.

So we can see that over time iPhone became a stronger competitor NOT only in a direct one-to-one context of product versus product, but also provided competition by virtue of the fact the iPhone became a more "useable" product because of the many 3rd party entities creating apps for the iPhone.

     
.
Competitors
are ....
Other organizations offering a variation on a product or service, that you cannot
    • which could be because you did not update your software to follow trends
Atlanta based software firm AirWatch LLC provides enterprise software that allows large companies to handle permissions and encryption on employees smartphones - something that previously could only be done on Blackberries, can now be down by AirWatch on androids, iOS, Samsung and Windows smartphones. "AirWatch is king of what is called MDM - Mobile Device Management - companies in the business of securing data on office issued devices".

Big accounts like Yahoo! and the Pentagon have dumped Blackberries and now let their employees use androids and iPhones which applow the employees to download more apps - at the same time as allowing the employer to have customized restrictions and encryption.

As explained in Maclean's by Andrew Hnath, "The Blackberry server's weakness is its lack of support for most next-generation toys".

AirWatch has grown from 350 to 900 workers in 2011-2012 !!
see the full story at  www2.macleans.ca/2013/01/07/the-company-thats-killing-rim/

.
Competitors
are ....
Organizations that could offer the same or similar products or services in the future 
  • not so obvious
  • like Rogers video stores getting into the cell phone market to compete w Bell Mobility
  • Polaroid cameras being eclipsed by digital cameras
  • Honda - in the beginning no threat cause they made motorcycles - but when they moved to North America, they began to make small cars
  • Rogers - known as a cell phone company competing with the cell phone division of Bell - then Rogers entering the "home phone" market to compete with Bell in a way in which Bell previously had no competition
.
Competitors
are ....
Organizations that could offer the same or similar products or services in the future 

Apple executives may have been wondering how much competition they would get from R.I.M.'s tablet, but what about Amazon, which was originally a website selling music and books online, and has morphed into a company that also sells a device (to read eBooks), which then means Amazon becomes a competitor in the market for electronic devices using web-based applications.
 
the new (2011) Apple iPad 5
- which also requires additional purchases of accessories which cost several hundred eg. protective case/cover, bluetooth keyboard
see  http://www.pcworld.com/article/235989/
apples_ipad_5_reasons_why_ill_never_buy_one.html
The Amazon Kindle Fire
At $199, it's $300 cheaper than the least expensive iPad 2

Big difference between the iPad5 and the Kindle Fire is not the physical products' features (With a 7-inch screen, Kindle Fire is a good bit smaller than iPad 2 and its 9.7-inch display.), or their FABs, it is the zillions of apps that are written for Apple products and can be downloaded and used on iPhones and iPads.

Future - Direct Competition - maybe not in 2011 cause the smaller screen on the Kindle means customers may still prefer to the iPad 5, BUT, some industry experts say 
 informationweek.com/news/hardware/handheld/231602330 
that with profits from the Kindle Fire, Amazon will launch a 10" version in mid-2012 which will definitely be an iPad Killer.

.
Competitors
are ....
Organizations that could remove the need for a product or service being sold
  • not obvious at all, but really important to know who is going to make you extinct
  • like the internet removing the need for encyclopedia's
  • like www.canada411.ca removing the need for "white pages"
When I bought my Garmin eTrex GPS in 2008 I carried it with my everywhere logging in points of interest and using the maps to locate my position.

When I got my newest BlackBerry in the summer of 2010 - which included GPS functionality, + Bluetooth, + some map apps, I almost stopped using the Garmin completely.
WTGR

When I got the Garmin Nuvi in Nov 2010, I bought the model with Bluetooth.

When my BlackBerry is turned on, the address book in my BlackBerry can be seen on the screen of the Garmin, allowing me "hands free" phoning - so I threw away my Bluetooth headset.

.
 
Competitors
are ....
Organizations that could remove the need for a product or service being sold

Sometimes an "entity" that could remove the need for one of your products or services can be found within your corporation - if this is the case, we sometimes refer to that circumstance as cannabilization.
see  witiger.com/ecommerce/cannibalization.htm 

  • Bell - cannabilizing it's own products - popularity of cell phones among young customers leading to a decline in young people obtaining land lines for phones when they get their first apartment
.
Competitors problems 
become opportunities 
for you
Sometimes when your competition does something better than you, it obviously can hurt your business.

There are also many situations when your competition, (direct and indirect) can make a bad mistake, or can have some problem, and this can conversely be good for your business.

A simple scenario can be your competition has a problem producing the product (which directly competes with one of your models) and all of a sudden you have an increase in customer demand (not because you did something right) because the available supply from your competition has dried up.

Being prepared for a possibility like this is important because if you can take advantage of it and satisfy those customers, they may end up staying with you and not return to the competition when the competition fixes the problem they had.

So, this type of "contingency planning" could be called "if the other guy screws up" planning.

.
Competitors problems 
become opportunities 
for you

from
http://www.thestar.com/business/small_business
/leadership/2013/06/12/cybersecurity-for-small-
business--hackers-and-mobile-devices.html
In June 2013 news stories from various sources commented on problems in cyber security for mobile devices.

Jared Lindzon wrote a piece in the Toronto Star about cyber attackers targeting smart phones. Quoting Tom Kellerman of Trend Micro, Lindzon explains that "the most prolific and viable attacks on small businesses in 2013 will be through mobile platforms".

Noted: Android's operating system is the poorest - partly because Google publicly released details of the OS - which made it easier for "bad guys" to build hacking tools.

Kellerman says “The most secure operating system for mobility is by far Blackberry"

.
Competitors problems 
become opportunities 
for you
June 12th 2013 the day WTGR reads the story about Google's Android OS being not secure, compared to the Blackberry - is coincidentally the same day that Richardson upgraded his phone from the Blackberry 8530 - which he carried for 3 years, to a new Google Nexus 4.
http://www.youtube.com/watch?v=xaitlAqePos&feature=youtu.be WTGR - "i made the switch because i wanted the functions and aps available on the Nexus 4, especially Google calendar, maps, SEO etc., but i regret giving up the comfort of Blackberry's security".

"Nonethless, it becomes a teachable point in how a company (Blackberry) can get a marketing boost when the competition (Android) is identified as having a weakness which might influence future buyers."

sorry to Kelly - who i accidentally referred to as Holly in the video
thanks to Gilbert for being the videographer
..
Competitors problems 
become opportunities 
for you
http://www.guardian.co.uk/technology/2012/dec/10/apple-maps-life-threatening-australian-police In December 2012 news stories from various sources commented on problems in the accuracy of Apple Maps.
In one case, the police in Australia warned that "using them was "life-threatening", after a number of people trying to find the town of 30,000 people became hopelessly lost in the bush in scorching temperatures."

Obviously this is an opportunity for other handset manufacturers using different operating systems accessing different maps, to point out that "ours does not..."

Apple "dumped Google's maps because the search giant refused to offer iPhone users features such as turn-by-turn navigation. But problems quickly emerged with the detail in the maps, which omitted a number of locations and mislabeled others compared with the product that had gone before"
http://www.guardian.co.uk/technology/2012/dec
/10/apple-maps-life-threatening-australian-police

.
Competitors problems 
become opportunities 
for you
"Apple dropped Google as its map provider in September [2012] with the launch of its iOS 6 software for the iPhone and iPad.

In October [2012], chief executive Tim Cook issued a public apology for the poor quality of the maps and soon after fired the head of the iOS 6 software group, Scott Forstall. The head of the mapping group is also reported to have been fired in November [2012]" 
http://www.guardian.co.uk/technology/2012/dec
/10/apple-maps-life-threatening-australian-police

.
The enemy of my enemy is my friend
- can Apple's competition from a Chinese firm, in China, prove advantageous to Blackberry?

4th week of Sept 2013 Maclean's published an article 
 www2.macleans.ca/2013/09/26/chinas-apple-clone/ 
by Rosemary Westwood discussing how a Chinese cellphone company, Xiaomi (pronounced Shao Mee) is selling well, and priced much lower than the Apple iPhone and much much lower than Korea's Samsung S4.
 
click on the screen capture to the right to hear WTGR's comments about this story.
http://www.youtube.com/watch?v=xPFEvtUOOTU&feature=youtu.be

 

.
witiger.com
  CONTACT I MAIN PAGE I NEWS GALLERY I E-BIZ SHORTCUTS I INT'L BIZ SHORTCUTS I MKTG&BUSINESS SHORTCUTS I TEACHING SCHEDULE
.
  MISTAKES I TEXTS USED I IMAGES I RANK I DISCLAIMER I STUDENT CONTRIBUTORS I FORMER STUDENTS I PUBLICATIONSfor those On The Level who believe in faith, hope and charity
.
.