Rapidly Changing Competition – How To Deal with It
Rapidly Changing Competition
There is one consistent message I hear from CEOs all over the world. Competition is tough and getting tougher. But what, exactly, does that mean? Does it mean there are more competitors, or that competitors have more resources than they did in the past? Or does it mean something completely different?
The raw data suggests a few, important facts that may be causing us to feel competition is more difficult today
First, it is true that there are more companies now than ever before. In terms of your market, there may not be more direct competitors. Companies, however, are meeting customers’ needs in more ways than existed in the past. Futhermore, some of these may lie outside of your direct competition.
The second big change is that there are more viable businesses that are smaller than was practical years ago. Because of changes in technology, small businesses can run with greater sophistication and less management cost.
The third big change that has made competition difficult for many is that distribution channels are changing faster than ever before. In the 1850’s, you might have bought many of your household goods at a general store. The general store was supported by a very different distribution chain than the supermarkets of the 1950’s. Between the 1950’s and today, distribution has undergone even bigger changes. Some retail markets bypass the conventional retail channel altogether in favor of mail order and, most recently, online sales. These changes are not just happening in markets where products are sold. Services are undergoing their own change, at a breathtaking pace.
Agility is a much more important competitive advantage than in the past
For many companies, these – and other – trends have made agility a much more important competitive advantage than in the past. For example, switching from brick and mortar to online or hybrid customer access has been a life and death struggle for companies that have survived over 100 years of change. That one change has accelerated in the past 10 years to the point that some have predicted the demise of many industries. Alternatively, others, of course, are being created. If you are agile enough to jump from one horse to the other your business may survive. Moreover, you may even thrive in this new, turbulent world.
One of the casualties of rapidly changing competition has been the common use of the static strategic plan
The idea that you could create and profit from a five year plan for your business has become laughable. Rapidly changing competition has made planning more important today than ever. The key is to be able to change and even scrap your old plan quickly. This is something many in the world of business strategy are loath to suggest. Many of us would be hesitant to develop a strategic plan, knowing it may be scrapped in six months. So how can we still profit from a good strategic plan without wasting time and money?
Three things to build into your strategic planning
The key to this, of course, is to build three things into your strategic planning that will make your plans more robust and adaptable:
- Plans must be created more quickly and inexpensively.
- Plans must be designed to change as the world changes – rapidly.
- Plans must be built around an awareness of which things are fixed in your markets, and which things may change.
Are you experiencing rapidly changing competition? If not yet, it may be coming your way. Do you need help developing a strategic plan that is adaptable to this changing world? Attend our seminar on Simplified Strategic Planning to learn more about competitve strategy and other aspects of strategic planning.
M. Dana Baldwin is Senior Strategist with Center for Simplified Strategic Planning, Inc. He can be reached by email at: firstname.lastname@example.org