Because competition cannot be avoided, a strategy is needed to deal with it. Although, business sustainability depends on sustainable transactions with consumers. Consumers can continue to make transactions if they don’t turn to competitors or other solutions. That is what is called losing competition. Consumers choose better competitors.
To maintain business sustainability, businesses strive to maintain competitive advantage. When compared to competitors, it is still an option for the target segment.
to deal with that, there are several generic strategies.
1. Cost-effective compared to competitors
If a business offers cost savings to consumers, it will be greatly taken into account in purchasing decisions. Consumers prefer to buy cheap goods for them.
For businesses, to reduce costs not only by reducing profits. Reducing costs can be done by efficiency of the production process, through more efficient technology, through mass production, through the replacement of materials without reducing quality, through renegotiation with suppliers or suppliers.
Differentiation is the difference in the product that allows the product to not be priced compared to competing products. Different that can be different designs, different qualities, different payment methods, different services and so on. Trust can be differentiation. Consumers are no longer price sensitive if they feel safe transacting with your business.
The company strives to increase the additional benefits that no competitor has. Products and services are constantly being improved and adjusted to the problems faced by customers. New ideas are developed for improvement and adjustment to customer desires. That makes competitors’ products obsolete.
Proximity to customers can also include competitiveness. Suppose the company manages and deepens its understanding with customers through friendliness and data collection of customer character profiles, so that customer specific needs are known. The data is used to improve products and services. That way, the company has differentiation competitiveness compared to other competitors.
Focus is also one way to compete. This focus can be both prices and specifications. If you can’t compete with prices in all markets, you may be able to compete at prices in specific markets. Competition also does not have to sell prices on special markets, it can also be cheaper consumer costs, because transportation coverage is easier. Focus is better than being exerting energy to be the best in all markets and fields. Because of the risks, he cannot achieve the best in all markets and fields.