The activities of companies that are trying to be more successful than others are known as competition. Competition describes the activity of trying to sell more goods and services and be more successful. Competition is the economic rivalry that occurs among businesses when producers in a given industry attempt to gain a larger share of the market.
Competitors are organizations selling products or services in the same market. Competitors may also be the products or services themselves. In other words, two or more companies which sell or manufacture the same product are competitors.
Competitors compete with each other or they are in competition. They compete for customers. To be ahead of its rivals the company must be competitive. There are things that give one company or product its competitive advantage or competitive edge over others.
Competitors in a market are sometimes called players, and the most important ones are key players. Key players are the main competitors in a particular industry. Smaller competitors are minor players. Companies without competitors are monopolies.
When competition is strong, you can say that it is intense, stiff, fierce, cut-throat, ferocious or tough. If not, it may be described as low-key.
To be competitive in the marketplace, each firm has to make SWOT analysis. It means the analysis of strengths, weaknesses, opportunities and threats.
In formulating strategy, a company should look at its strengths and weaknesses in relation to its competitors. For example, a good sales team is a strength and poor internal communication is a weakness.
The company should look at opportunities and threats in its environment: the strength of competitors, government regulation, the way that society is changing, etc. These are external factors. For example, a change in a country’s legislation on broadcasting might present an opportunity for a group that wants to buy a television company there. The change would probably pose a threat to existing broadcasters.
The ways a company organizes and combines its human resources, know-how, equipment and other assets are its core competencies. These are internal factors.
A company’s marketing system is surrounded by a host of competitors. The best way for a company to remain competitive is to take the viewpoint of a buyer. Let us consider the following case. Suppose a person has been working hard and needs a break. The person asks, ‘What do I want to do now?’ Among the possibilities that pop into his mind are socializing, exercising and eating. These are desire competitors. Suppose the person’s most immediate need is to eat something. Then the question becomes, ‘What do I want to eat?’ Different foods come to mind, such as potato chips, candy, soft drinks, and fruit. These can be called generic competitors in that they represent different basic ways to satisfy the same need. At this point the person decides on candy and asks, ‘What type of candy do I want?’ Different candy forms come to mind such as chocolate bars, licorice, and sugar drops. They all represent product form competitors. Finally the consumer decides on a chocolate bar and faces several brands such as Hershey, Nestle and Mars. These are the brand competitors.
Unfortunately company executives tend to focus primarily on the brand competitors and on the task of building brand preference. In fact, companies are myopic if they focus only on their brand competitors. The real challenge is to expand their primary market rather than fight for a larger share in a fixed-size market.
2. Complete the sentence:
Competition takes place when the company …
a)expands its primary market..
b)has many strengths and opportunities according to SWOT analysis.
c)tries to gain a larger share of the market.
d)organizes well its human resources, know-how, equipment and other assets.
3. Answer the question:
What do companies usually focus on?
a)On competitive advantages of their competitors.
b)On external factors in their environment.
c)On the brand competitors.
d)On SWOT analysis of rival firms.
4. Define if the statement is True, False or No information:
a)Competitors do not produce or sell the same goods and services.
b)Different ways to satisfy the same need is called generic competitors.
c)External factors are more important than internal ones.
5. Match the words with their definitions:
1.To try to get business for oneself or one’s company, against rivals in the same industry, or to try to do better than another person or company.
2.Relative position in the marketplace.
3.A plan for achieving a company’s objectives; a particular utilization of resources.
4.Rivalry between businesses in the same market; a contest with prizes used as a sales promotion.
5.A rival organization offering similar goods or services.
6.Able to offer a good price compared with rivals.
7.The value created by a company and passed on to its customers that makes it better than its competitors (e.g. a cheaper or a better product).
8.The situation in which there is only one seller of a product or service.