The Land of Technology

In a free market economy, each company tries to surpass its competitors. A competitor is a rival. A company must know, therefore, how it stands up against each competitor with regard to “arms and ammunition”—skill in maneuvering Chances, preparedness in reacting to threats, and so on. To obtain adequate knowledge about the competition, a company needs an excellent intelligence network.

Generally, whenever one talks about competition, emphasis is placed on price, quality of product, delivery time, and other marketing variables. For the purposes of strategy development, however, one needs to go far beyond these marketing tactics. Simply knowing that a competitor has been lowering prices, for example, is not sufficient.
Over and above that, one must know how much flexibility the competitor has in further reducing the price. Implicit here is the need for information about the competitor’s cost structure.

The term competition defies definition because the view of competition held by different groups (e.g., lawyers, economists, government officials, and businesspeople) varies. Most firms define competition in crude, simplistic, and unrealistic terms. Some firms fail to identify the true sources of competition; others underestimate
the capabilities and reactions of their competitors. When the business climate is stable, a shallow outlook toward the competition might work, but in the current environment, business strategies must be competitively oriented.

Tags: Competition