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How To Deal With Business Competitors

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From a managerial perspective, competition generally falls into the external environment, though it can also take shape in the internal environment through rivalry between strategic business units (SBUs). For managers, understanding the external competitive landscape is a critical factor in assessing company strategies and benchmarking appropriately to ensure the competitiveness of the firm. Businesses that fail to keep pace with their rivals will eventually be overpowered and often forced to develop an exit strategy.

Avoiding the risks of competitive factors demands a strong understanding of operational efficiency (low cost), quality production, differentiation, and competitive advantage—or who you target and whether or not you have a cost or quality advantage.

Cost vs. quality

Companies generally achieve either a cost or a quality advantage (very rarely, both).

Low-Cost and Branding

The simplest perspective on competition is in industries where products are homogeneous (or very alike). In such a situation, companies compete directly. For example, bottled-water producers are directly involved in such a framework and thus adopt two basic competitive strategies: low-cost and branding.

Low-cost suppliers find ways to optimize their production and distribution to offer consumers the lowest possible price on one bottle of water. Low-cost suppliers often benefit largely from economies of scale. Branding, on the other hand, aims to convince the consumer that a higher price point is worth paying based upon the company’s name, reputation, or other distinguishing characteristic. For example, Dasani brand water costs more than generic store brand water, despite being essentially the same product. Commercials, aesthetic presentation, goodwill, and factors other than price may then influence a consumer’s purchasing decision.

Differentiation

Most products and services are not homogeneous, however, allowing incumbents in an industry to compete with one another by means of various competitive strategies. Differentiation is a competitive tactic wherein companies approach certain niche needs within an industry to capture a segment of the market share.

An example of differentiation might be cereal. There are hundreds of different kinds of cereals. The need being filled is sustenance: people need to eat. The producers of these cereals use differentiation to capture a share of the cereal market: some brands focus on their organic nature, others their sugary appeal, and still others on being “cool.” Branding plays an important role here as well, though assessing niche consumer needs and filling them is the principal focus.

Quality

Finally, there is the potential to compete externally based upon quality. Toyota makes both the Corolla and the Lexus, thereby targeting both ordinary automobile drivers and those in the luxury-car consumer bracket. Quality competitive strategies, while related to branding, provide a particular level of quality to capture a specific income or interest demographic. The opportunity cost of efficiency is associated with quality, which generally sees higher price points. Quality is therefore a strong antithesis to the low-cost strategy.

Internal Competition

Businesses also compete internally, an intrinsically complex issue. On the surface, internal competition involves either direct product substitutes or funding competition (among different business units). An example of internal competition is PepsiCo. Pepsi makes both colas and sports drinks, all of which sit on the shelf next to one another. When a customer sees the sports drink and chooses it over the cola, the cola has lost a sale to an internal competitor. Pepsi, however, did not lose a sale; it merely lost one segment of the business while gaining another.

With these points in mind, managers must thoroughly understand the products they are pitching and which strategy will help them avoid going toe-to-toe with other businesses with whom they cannot compete. Starting up a car manufacturing business to compete with Hyundai in the low-cost market is extremely difficult, as Hyundai has economies of scale in place that will almost always beat smaller competition on a low-cost strategy. This example illustrates an extremely important point in business: rely on strengths. Managers must understand their own competitive advantage (what they do better than the competition) to adopt the appropriate competitive strategy to gain market share and remain profitable.

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Entrepreneurship

Women on Top in Tech – Espree Devora, Creator, Podcast Producer, and Host at WeAreLATech.com

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(Women on Top in Tech is a series about Women Founders, CEOs, and Leaders in technology. It aims to amplify and bring to the fore diversity in leadership in technology.)

Espree Devora is known as “the Girl who Gets it Done”. She created WeAreLATech.com, a hub for entrepreneurs to connect to resources in the Silicon Beach community, which hosts the 1st podcast focused on LA Startups. She is also a podcast Producer and Host of the show, Women in Tech Podcast. The purpose of the show is for every listener to walk away feeling ‘If She Can Do It So Can I’. She calls it “actionable empowerment”. In 2017, Espree was listed by Inc Magazine as top 30 Women in Tech to follow.

What makes you do what you do?
Being an entrepreneur is in my blood. Some days are epic highs. Others are incredibly uncomfortably low. It’s not an easy day to day life, but living with a sense of purpose is an extraordinary gift.

How did you rise in the industry you are in?
Being myself. Pushing through my fears to be positively vulnerable. To live as though I am always mentoring even though I may not know who’s paying attention.

Why did you take on this role/start this startup especially since this is perhaps a stretch or challenge for you (or viewed as one since you are not the usual leadership demographics)?
I’ve always loved media production. It’s a creative art form that can have long lasting positive effects on the audience who absorbs the content I create.

Do you have a mentor that you look up to in your industries or did you look for one or how did that work? How did you make a match if you and how did you end up being mentored by him/her?
I do now have a mentor I look up to to be my most powerful self. We met at a conference and we speak regularly to work past my self-limiting beliefs and to build an abundant life, both spiritually and professionally. My mentor’s name is Debra Hockemeyer.

Now as a leader how do you spot, develop, keep, grow and support your talent?
I seek out integrity and a moral compass code. I want empowering solution mind teammates who value our company culture.

Do you consciously or unconsciously support diversity and why?
Yes, because we’re human.

What is your take on what it takes to be a great leader in your industry and as a general rule of thumb?
Lead with vulnerability, let your audience share in the progression of your journey.

Advice for others?
Your “intuition is your oracle”. Walk your own path, don’t try to be someone else. They had their journey so it’s time for you to create your own journey now.

People crave connectivity, not celebrity. So rather than trying to look big, instead focus on creating immense positive impact in each person’s life (be it customer or partner or friend)

My Mom always says every “No” is one step closer to a “Yes”.

We want to continue to build connective technology, produce meaningful media and create unique offline experiences in the startup space to move people from online digital relationships to high quality offline relationships.


If you’d like to get in touch with Espree Devora, please feel free to reach out to her on LinkedIn: https://www.linkedin.com/in/espree/

To learn more about WeAreLATech.com , please click here.

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Callum Connects

Darvin Kurniawan, Founder & CEO of REIDAO

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Darvin Kurniawan is impressed by blockchain technology. He believes it will change the way we live in the not so distant future. His business, Crowdvilla.io is using blockchain technology to change how society owns assets.

What’s your story?
I was trained in computer science and I went on to appreciate the many facets of business. I delved into multiple industries, which equipped me with the many skills to become a ‘jack of all trades.’ This allowed me to see things from various points of view and to identify opportunities and potential risks.
I heard about bitcoin for the first time in 2011. It was very difficult for me to understand back then. I revived my interest in blockchain technology near the launch of the second most popular blockchain, ethereum and I have been involved ever since.

What excites you most about your industry?
Blockchain has a real chance to change how we live as a society. This is not just as a business or start-up, but a way of life.

What’s your connection to Asia?
My grandfather came from China to Indonesia. I was born in Jakarta, Indonesia. I moved to Singapore for university and have stayed here since then.

Favourite city in Asia for business and why?
Singapore, for its efficiency, and very clear rules and regulations. Not to mention the relatively competitive tax rate.

What’s the best piece of advice you ever received?
“Just try it out.” So simple, yet many fail to appreciate the fact that surveys and questionnaires sometimes just don’t work.

Who inspires you?
Nassim Nicholas Taleb, a writer. He inspires me because of his ability to see things the way they are. He articulates points that I knew existed, but I couldn’t explain. That’s what makes me drawn to his writing.
Basuki Tjahaja Purnama (Ahok), a politician. He is able to say what’s right, no matter what!

What have you just learnt recently that blew you away?
A blockchain AI project by SingularityNET. It’s going to change how we live if it goes mainstream.

If you had your time again, what would you do differently?
I would have been more persistent in my endeavours. I learnt the hard way. In many cases, what was needed was time.

How do you unwind?
I frequently take a long stroll.

Favourite Asian destination for relaxation? Why?
Lombok, Indonesia. It’s not as crowded as Bali, with similar, if not better beaches. It’s perfect for a quiet time and a short getaway.

Everyone in business should read this book:
Antifragile: Things That Gain from Disorder by Nassim Nicholas Taleb

Shameless plug for your business:
It’s more than just a business. It’s a movement. Crowdvilla.io is changing how society owns assets. Through blockchain technology and the ability to create digital assets, we can create digital assets that mimic and govern a real estate utilization model.
Imagine if there was a hotel chain where the buildings or assets were owned indirectly by the community, and the hotel’s mandate was to make itself available for the community to use. Removing all the middlemen, we can immediately give better value to the community.

How can people connect with you?
[email protected]

Twitter handle?
@darvink

This interview is part of the ‘Callum Connect’ series of more than 500 interviews

Callum Laing is an entrepreneur and investor based in Singapore. He has previously started, built and sold half a dozen businesses and is now a Partner at Unity-Group Private Equity and Co-Founder of The Marketing Group PLC. He is the author two best selling books ‘Progressive Partnerships’ and ‘Agglomerate’.

Connect with Callum here:
twitter.com/laingcallum
linkedin.com/in/callumlaing
Download free copies of his books here: www.callumlaing.com

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