The global marketplace is changing rapidly and competition is fiercer than ever. Asian companies are beginning to eclipse U.S. and European rivals in a range of industries, according to Business Week. Toyota will soon surpass General Motors as the largest auto manufacturer and the market cap of several Indian service companies are now approaching the size of General Motors. In a recent issue, Business Week explored ways that successful companies are adapting and staying ahead of the competition, which is information any direct marketer could benefit from.
Differentiation
Industries are under attack from competition that didn’t exist a few years ago. For example, eBay is taking on the major telecommunications companies through their free Internet phone service Skype. Google’s email and word-processing services are taking on Microsoft and Google’s advertising services are challenging Madison Avenue. Instead of fixating on competitors, companies that are standing out in the global marketplace are finding ways of differentiating themselves by creating new markets. In today’s business environment it’s sometimes more important to be unique rather than the biggest player in your industry. Whole Foods is an example of a smaller grocery retailer that found a profitable niche and brand loyalty among a group of customers interested in a healthier and more eco-friendly lifestyle. (Business Week).
Developing New Markets
Cirque du Soleil, Apple and Starbucks are examples of companies that created new markets and have reaped the rewards from creating innovative products, according to Business Week. How profitable can it be creating a new market vs. developing a product that is merely a brand extension? Research contained in a book Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne showed that “86% of product launches that were line extensions accounted for 39% of the profits from all new-business launches from 108 companies tracked, but the remaining 14% of product launches that represented new markets accounted for 61% of profits!” (Business Week) The lesson here is that you don’t have to be mega brand to be profitable.
Customer Service, Personalization and Efficiency
Understand what your customers want and use that information to your advantage. Google instantly surveys millions of consumers and businesses that have websites that link with one another. This allows them to produce better search results than their competitors, according to Business Week.
The trend towards mass producing products is also declining. Successful companies like Dell and Land’s End are supplying customers with customized computers and clothing, rather than trying to mass produce products appealing to the broadest audience. It’s also not enough to differentiate your company today by just being the low cost producer. But it is important to be efficient, in order to remain competitive, according to Business Week.
Competition is constantly evolving in today’s marketplace and the companies and their leaders that are in touch with the ways that winners are differentiating themselves are going to stay a step ahead of the competition.
