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Wednesday, June 17, 2009

How can you benefit from your competitor

Many people believe that competition serves only the benefits of costumers, which is true because companies, marketing the same product-type, are obliged to competitively struggle to provide the costumers with better product at lower price and faster distributing channels. Even entrepreneurs tend to desire that they would have less, if not no, competitors so as to keep manipulating a given market, with low costs and steady-increasing benefits. However, competition in marketing has far more positive effect not only on the consumers but also on the competing companies. In this essay, I will try to shift the traditionally-held perception of compotators, by arguing that competitors can help their rivals to save their firms and expand their markets.


True enough, the existence of markets, selling the same products/services, represents a great challenge in front of their competing markets/companies. The latter have to be always on the move: ready to react to their rivals competing strategy and act in a preemptory fashion, which requires strategic thinking and perhaps additional budget.  And after taking these measures, it still not sure which company might win the game as long as there are many other external factors controlling the business environment – costumers – that must be considered and anticipated.


Nevertheless, the existence of competitors can have an outstanding positive impact on the second party. First, thanks to competitors that other companies perpetually update their core strategies in terms of the quality of their products/services, communication channels and costumer services. This ongoing movement of companies helps in well-repositioning and leveling the sale of their products/services within markets. Second, companies can benefit from their competitors research results and use the latter as secondary data to either update the strategy or develop innovative product/service line; thus, the market research costs less funds thanks to the information provided by other companies. Also, sometimes the success of certain market serves competing companies to design competitive industry on the basis of the characteristics of the existing products. In this case, the presence of a company’s competitors is rather beneficial. Third, and finally, second to the advertising channels of a given company are indeed competitors. Most of the time, while promoting the image of their products/services, companies are implicitly admitting the existence of similar products, but perhaps not with the same effectiveness or the same price. The point I am trying to make here is that sometimes costumers are informed about the existence of given products through the existence of latter’s competitors, rather.


The cola war, discussed at the opening of chapter six of the text book, is a relevant illustrating example. Both Pepsi-cola and Coca-coal are two brands that fall under the same product type. The two companies have been competing for decades. Ironically, although Pepsi has always been the leader in terms of innovative marketing programs, Coca has consistently been the leader in terms of sale. The success of Coca has most of the time been induced by the existence of Pepsi. For instance, right after Pepsi’s development of the idea of supermarket sales, lunching a larger bottle size to capture family consumption, and expanding its product lines by including Diet Pepsi, Coca-cola responded back by matching Pepsi’s use of larger bottle size, using cans, and introducing new product line such as Sprite. Coca’s innovation turned out to be a success. Yet, that success would not have seen light, if it had not been motivated by Pepsi’s precedent campaign.


To rap it up, competition does not only serve the customer, but the counterparties as well. Many companies, that are leading the world market, started as small businesses. I believe that among the incentives that contributed to their success are their actual and rival competitors. Can you remember how many ‘As’ did you get, when you were a student, because of the challenging decision you took after getting a ‘C’ while one of your classmate had gotten an ‘A’ in the previous assignment.  After getting an ‘A’, you said: ‘yes I did it”. But you missed the fact that it was your classmate who actually helped you in that. Politically speaking, the out-measured popularity that helped G.W.Bush win the second election was mainly because of his propaganda of the war against terrorism and the chasing of Ben-Ladden. Ironically, it is Ben Ladden who has granted Bush the widespread popularity in the middle-east area; in return, Ben-Ladden’s popularity in the western world was indeed made true by G.W. Bush. Selfsame, the long-lasting life-circle of both Pepsi and Coca is partially the result of the old-dated competition between the two companies. This is just to say that sometimes our efforts can be a success due to our existing competitors.


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