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ENTERPRISE
SUCCESS STRATEGY TIPS
It is important for all
enterprises to secure competitive advantages in the market to succeed in their
venture. Thus, to be an active player in
the market, each enterprise needs to focus on monitoring the external
environment and securing competitive intelligence.
The external environment
refers to the factors contributing outside the control of an enterprise that
can impact its success. Analyzing and
understanding the external environment is vital to identify its threats and
opportunities. Competitive intelligence
helps in getting information about competitors and evaluates the strengths and
weaknesses of competitors to develop a winning strategy.
External Business
Environment Monitoring
Environmental monitoring
results in adapting to changes in the external environment. It is a process of collecting and analyzing
the customer’s needs, wants /preferences, and analyzing the new emerging trends
in order to forecast mast performance in the coming months.
The market forecast plays
a vital role in environmental monitoring. Forecasting helps enterprises to
prepare for and respond to the changes in external environment trends, and
shifts in consumer behavior which are difficult to predict and control. The external environment trend can be
economic, technological, behavioral, demographic, and sociocultural
factors. Multiple scenario analysis in
forecasting helps to identify how trends affect the market and profits of an
enterprise.
Competitive Intelligence
Timely collection and
analysis of competitive intelligence help to avoid surprises for an
enterprise. Good industry analysis
involves the evaluation of key factors that define a specific industry and
helps enterprises to make informed decisions about their strategy and
operations. While doing an industry
analysis, it is important to review the market presence and strategies of
immediate competitors. It will give adequate
input to assess the industry.
Conducting a good industry
analysis and identifying strategic groups within an industry helps an
enterprise to understand the competitors, marketing opportunities,
profitability, and evaluation of their performance. Generally, the strategic group consists of
firms with similar competitive approaches and positions in the market. The identification of strategic groups within
an industry enables the competitive structure of the industry to be redefined
to compare strategies of various competitors for similarities and difference
Porter’s Five-Forces Model
of Industry analysis is a quick mode to assess the competitive environment of
an industry. It analyzes the competitive
forces in an industry and assesses the attractiveness and potential
profitability of the industry or market.
The five forces in the model are:
·
The threat of new
entrants: It is an easy entry for new competitors into the market. Factors such
as capital and barriers contribute to the entry of new entrants.
·
The threat of
substitutes: The optional availability of products and services which can meet
consumer needs. The greater the number
and quality of substitutes, the greater the threat.
·
Bargaining power
of suppliers: It is the power suppliers hold in bargaining the price and
quality of the product. Suppliers are
powerful when there is no competition from substitute products and there are
only a few competitors in the market.
·
Bargaining power
of buyers: It is the power buyers have over the companies in the industry. Factors that can impact are the size of
buyers and the importance of products or services of the buyers.
·
Rivalry among
existing competitors: It is the level of competition among existing companies
in the market. This includes the number
of competitors, marketing strategies, pricing strategies, competitive
advantages, advertising battles, increased customer services, and warranty.
The internet and digital
technologies have a significant impact on competitive forces in various
industries. For example, in the retail
industry, digital influence has led to the emergence of online market players
such as amazon, flip kart, etc. Amazon
disrupted the traditional way of selling.
Amazon’s online platform allows reach wider customers than traditional retail
stores, and it also has special features like one click, home delivery, etc. This pressurized traditional retail stores to
adapt their business model to compete with online retailing. Through this many traditional retailers have
opted for Omni channel business to increase profits and acquire customers.
Thus, it is good to analyze
the external environment and collect market intelligence to secure a
competitive advantage for an enterprise to succeed in the market. Understanding key components of the external
environment and conducting industry analysis help identify potential
competitive advantages and implement suitable strategies to enhance Competitive
advantage in the market.
DART Consulting provides
business consulting through its network of Independent Consultants. Our services include preparing business
plans, market research, and providing business advisory services. More details
at https://www.dartconsulting.co.in/dart-consultants.html
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