28 Jun 18 Who is your competitor?
In the last century, identifying competition was fairly easy. The industry comprised of companies that were selling similar products or services, and were trying to grab market share. Today, the situation has changed quite significantly.
We have evolved from the age of diversification to focus, and are again probably reverting to the mean. With the advent of technology, particularly smartphones, there are new kinds of competitors. Michael E. Porter had written a bible on competition, but as time has gone by, the book needs to change.
A company can be your competitor as well as your customer. Let’s take an example:
- Who’s Google’s competitor – Another advertising space company, or Amazon for their hardware, or Samsung / Apple for their mobile phones, or business directories like JustDial. And at the same time, both Google and Apple sell their products on Amazon.
- Who’s Walmart’s and Barnes & Noble’s competitor – Amazon
- Who’s Amazon’s competitor – Another e-commerce company like Flipkart? Or is it competing TV channels / theatres (for Amazon Prime), or are they companies hosting web servers?
- Earlier Coca Cola had rightly identified that it was not competing with Pepsi; its primary competition is NimbuPani or Butter Milk ubiquitous stands.
In the B2B space, traditional distribution channels are likely to be impacted with the onslaught of Alibabaand AliExpress.Companies can directly purchase the required quantities from them, taking dealers and distributors out of the equation.
Being in a capitalist society, and in the age of disruption, you cannot prevent competition; but is essential to understand who your competitor is today and who can be your competitor tomorrow…So how can that be done (for B2B players especially)?
- Online checking for the products or services which you are selling -it will throw up names of companies offering similar services (whether online or offline)
- Checking industry directories
- Google maps
- Tracking competition from the traditional medium of customers and companies salesforce
More importantly, it is necessary to have a very open mindset to accept that even a new entrant can pose a major threat in the future – David and Goliath will always exist.