03 Sep 13 Track your competitors – Close the stable door before the horse bolts
In the last three to four years many sectors in India have seen the entry of new competitors from China, South Korea, Taiwan and other countries. They are coming in with low prices and high technology and changing the dynamics of the market. They have started eating into the market shares of the incumbent market leaders, who are the large Indian or multinational companies.
The new entrants, no doubt face many challenges arising out of their unfamiliarity with customers, regulations, markets, and so on. However, they are changing the expectations of the customers, shaking up the distribution supply chains, and in some cases, even impacting the structure of the industry. For example, the specialty chemicals sector, which is characterised by a large number of small and medium companies, is expected to see consolidation through M&As as a result of the fierce competition.
Loss of market share is painful, and in a scenario of low or no economic growth, it is doubly so.
So what can the incumbents do, to protect their turf? For a start, they need to abandon their set ways of doing business and learn to be flexible and nimble, to respond to their competitors’ initiatives proactively. In order to do this, they first need to understand what the competitors are doing.
- Have they set up only a sales office or are they also manufacturing in India?
- How is their sales force organised?
- What is their go-to-market strategy?
- Which products are they pushing?
- In which geographies?
- To what kind of customers?
- In which industries?
- What is their product pricing? Are they bundling products?
- What is the key messaging they are doing? What USP are they pushing?
- How are they delivering their after-sales service?
- What kind of people are they hiring? From where?
- How are they perceived by the customers? What are their strengths and weaknesses? Why are the customers buying or not buying from them?
Answers to these and many more questions will help the incumbents to protect their market share by developing and refining their own competitive strategy and approach to their customers. While most incumbents may have a pretty good understanding of their traditional rivals, they are quite clueless about the strategies of the new entrants.
The important thing, of course, is to close the stable door before the horse bolts. This requires proactive action. It is not possible to be proactive without continuously monitoring and tracking what your competitors are doing.
After all, it is said that if you know your enemies and know yourself, you will not be imperiled in a hundred battles; if you do not know your enemies but do know yourself, you will win one and lose one; if you do not know your enemies nor yourself, you will be imperiled in every single battle. – Sun Tzu