At first sight, the answer to the question ´Who is your competitor? seems easy: All companies which produce or market similar or comparable products and services. However, this is a limited view, because, in general, competition is not limited to direct rivals, but goes far beyond. And management practice shows that it is the indirect or new competitors which are the most dangerous as they are either unknown or not considered rivals in the first place.
Your customer is not interested in your products and services at all! He buys from you, because he wants to solve his problems and reach his targets. That may sound provoking, however, the customer is always focused on his own benefit. To him, your products and services are the vehicles which provide this benefit.
Many companies are facing the challenge of product ´commoditization´ over time. Commodities are offerings with no unique differentiators, sold primarily via low prices. Example: 10 years ago, the mobile phone was something special and the privilege of important decision makers who had to be accessible at any time. Today, mobile phones offering the basic ´telephoning´ function have become a commodity (throw-away product), and competition has shifted from hardware (the mobile phone) to software and internet connectivity.
Excellent business strategies rest on 5 pillars. They can be used as a benchmark to review existing strategies or to develop a new strategic direction.
Many producers of industrial products are facing increased price pressure. Competition is mainly coming from Asian low-price companies which aggressively enter European markets. To avoid a cutthroat price battle, an increasing number of companies offer services in addition to their physical products. This allows them to create added value for their customers and to differentiate themselves from low-price rivals. In addition, product-enhancing services help to build customer loyalty and to generate additional income.
