A different industries between one and the other based on the characteristics of the economy, the competitive situation, and the prospects for growth in the future. The rate of change of various factors such as technological, economic, market and competition will move in a range tetentu ranging from slow to fast. Analysis of the industry and the competition will use specific tools and techniques for companies to be able to adapt to change and then forming strength in the face of competition.
Understanding the industry is a business or activity processing of raw materials or semi-finished goods into goods, finished goods so that has added value to benefit.
Some things that can be identified as the main economic factors which have influenced the strength of an industry is market size, the scope of the competition, the market growth rate and life cycle of the industry, the number of competitors and the relative magnitude of each of the company's competitors, the number and the relative magnitude of potential buyers , the urge to do the integration forward and backward, as well as the ease and barriers to entry or exit of the types of industries.
Industry is closely associated with the competition. Because there may be an industry just stand alone without any relationship with other industries. An industry producing a product must also use material obtained from other industries. For that, one industry to another industry that is always in touch and do not often make competition.
In this paper we will explain the industrial relationship with competitors. Industry competition occurs when a firms assume competitors are all companies that make products or the same product class. Next will be discussed on the analysis and identification as well as the factors that exist in the industry competition.
A. Strength Competitors and Industry Analysis
Analysis of the industry is a combination of industrial economics and strategy. Beginning with the addition of industrial organization theory by Joe S. Bain (1950) which states that the structure of the industry is not just limited on the size of the industry, but is also determined by the mobility barriers to entry into the industry. Further developing the theory of industrial structure that is based on the premise that the differences in the level of corporate profits is a function of market forces driven by the structure of inter-industry and intra-industry. Porter stated that the five competitive forces that can develop competitive strategies to influence or alter the strength in order to provide a favorable situation for the company.
The scope of these five competitive forces that first is the threat of competition tight segments, certain segments become unattractive if it already has a lot of competitors, strong, or aggressive. Second, the threat of new entrants, the attractiveness of different segments according to the high barriers to entry and exit. Thirdly, the threat of substitute products, certain segments become unattractive if there is a substitution of actual or potential products. Fourth, the threat of an increase in bargaining power of buyers, certain segments become unattractive if the buyers have bargaining power (bargaining power) is strong or growing. And finally, the fifth that threatens to increase the bargaining power of suppliers, certain segments become unattractive if the supplier companies were able to raise prices or reduce the quantity they supply.
Industry if grouped according to the number of sellers is as follows: pure monopoly, only one company that provides products or services a particular region. Pure oligopoly, made up of several companies that produce commodities that are basically the same. Differentiated oligopoly comprised of several companies that produce partially differentiated products (cars, cameras), according to the line quality, feature, or service mode. Monopolistic competition, many competitors are able to differentiate their offer in whole or in part. Pure competition, many competitors offering similar products and services. Certain industry competition structure may change from time to time.
The main barriers to entry which concerns a company including capital requirements, economies of scale, patents and licensing requirements, scarcity of locations, materials, or distributor, the requirement of reputation. Even after the company entered into certain industries, it may face obstacles when he tried to enter the mobility market segments better. Exit barriers often faced by companies, such as the legal and moral responsibility towards customers, creditors and employees, government restrictions, a low residual value of assets due to too specialized or using, lack of alternative opportunities, vertical high integrity and emotional barriers.
Every industry has certain costs that much form the action strategy. Companies find it more beneficial to perform integrity upstream or downstream (vertical integration). Major producers of petroleum in the exploitation of petroleum, petroleum drilling, petroleum refining, chemical production, and operation of vehicle repair services. The level of corporate globalization in the global industry must compete globally, if they achieve economies of scale and to follow the latest technological advances.
B. Identify competitors
Identification competitors include the type of products offered, namely see the huge market dominated (Market Share) competitors, opportunities and threats, as well as their advantages and disadvantages. Sometimes a particular company has a diverse product. The task of the company is fully and correctly identify what products are owned by competitors. Identify who the main contenders are nearby as well as other competitors are also potentially threaten our company now and in the future. To see the huge market held by competitors, can be done through a market segment that will be entered. In this case the company shall estimate the market size and the market share of each competitor. Market share is to be known for the present and in the future, both controlled by a competitor or as a whole.
By estimating the market share, it would seem that there are opportunities and threats that may arise now and in the future. Every opportunity must be entered and attempted to create new opportunities as much as possible. Possible threats or problems that arise must be anticipated so as not to cause a problem. Identification of weaknesses and advantages mean mapped or find out the advantages and disadvantages of being owned competitors. Identify competitors' weaknesses and excellence in various fields, for example in terms of the completeness of the product, quality, packaging, pricing, distribution, location, and promotions.
C. Analyzing Competitors - Objectives and Strategies
One useful starting assumption is that the competitors are trying to maximize their profits. However, it will vary the weight given by a number of companies on short-term profits and long-term.
A group of companies that apply the same strategy on a particular target market so-called strategic group. Selecting a competitor can be done in two ways: with a strong competitor versus weak competitor and competitors close versus distant competitors.
Among the strategies used include:
1. Strategy market leader
Most industries have a company known as a market leader. The company has the largest market share in the relevant product market. This company advantages of other companies, in general, include changes in prices, the introduction of new products, distribution channels and intensitaas inclusion promotion. The Company is the market leader may not be admired or admired, but who clearly recognize its dominance among other companies. The company became the central point of orientation of the competitors, it is a company that is challenged, imitated or shunned.
The dominant company always wants to remain number one. This attitude prompted him to take action in three directions. First, companies must find ways to expand the number of overall demand. Second, the company must keep the market rate that it controls in a way to survive and attack well. Third, the next future the company may try to increase its market share despite the broad market has not changed.
If the market develops, usually companies dominanlah who benefit most. Basically, the company that will lead the search for new users, new uses and use more of its products.
Each product class has a chance to attract shoppers who do not know the product or who reject it because of the issue price or lack of certain features on the product.
The market can be expanded with a way to find and introduce new uses of a product. Following the use of products by consumers is the obligation of the company to be continuously carried out, this principle applies both consumer products and industrial products.
Use of Better
The third strategy is to convince the market for the development of consumer society in order to use the product more on each occasion.
What can be done to maintain power market leader? The most constructive action is continuous innovation. Market leaders do not want to be dictated by circumstances and lead the industry toward new product ideas, customer service, distribution effectiveness and cost reduction.
Market leaders can also develop by increasing its market share. But companies should not think that the increased market share will in itself improve their lab. It much depends on the strategy to increase the market share. Costs to increase market share may far exceed the value of its sales.
Kotler (1993) states that: "There are three factors to consider before seeking enterprise market share gains".
The first factor is the possibility of an act of anti-trust. Competitors who covet tend to shout "monopolization" if the company is dominant undertake further measures to capture market share. This risk will reduce the attractiveness of the market share is too far. The second factor is the economic cost. Costs necessary to gain additional market share more than it has now (which was great), often increased rapidly, resulting in an erosion of profits. Companies that instance has a 60 percent market share should be aware that some customers may not like the company and loyal to its competitors. Maybe they have distinctive needs, or prefer to deal with smaller companies. Moreover, the competitor must have worked hard to win back market share. The third factor is the possibility of the company taking the wrong marketing mix strategy in its efforts to achieve a higher market share. This obviously will increase the company's profits. Although certain elements of the marketing mix will be more effective in increasing the market share will not always bringing forth more profit.
Market challenger strategy
Basically, the attacker can choose one of the types of companies:
The company attacked the market leader
This option carries a high risk, but it can be a strategy that will generate a lot and really makes sense when the market leader is not a "true leader" and did not meet the market needs perfectly. The fields to be scrutinized is the needs of consumers or their dissatisfaction. When in reality, many "rooms" that are not or less fulfilled, then this will be a good strategic targets.
Company attacked the regional companies of smaller less successful as well as lack of funds
Both customer satisfaction and the potential assimilation need to be investigated in detail. Even frontal assault could succeed if indeed another company's resources are limited.
Thus it appears that there is an interaction between choosing who the opponent to choose what would be targeted. If the company leads the market leader attacker, the target could be the capture market share.
If we suppose that there are opponents who occupy a particular marketing area, then there are five offensive strategy that can be done, namely:
The attacker is said to do a frontal assault when he mobilized the masses and the right strength to deal with opponents. He is attacking the opponent's strength rather than a weakness point opponents. How the results will depend who has the strength and durability greater. In the attack completely frontal, the attacker rival product, advertising, price and so on from his opponent.
Attacks Soar (Flank Attack)
Areas that are expected to be attacked always have the strongest forces. That is why the region and the rear wing is often weak, so it is an enemy of the target area. Fundamental principle of modern attack is "the concentration of power to attack the weaknesses". Attackers will behave as if attacking the strong, so that the opponent exert all power to the part, but the real attack will be directed on the wing or behind. This maneuver is often not encounter any resistance, because it is less secure. The attack was an act of brilliant marketing, especially for companies challengers who lack the resources owned by the opponent. If the company can not attack the opponent with full force, so he could use their minds.
Attacks encircle (Encirclement Attack)
Is the opposite of the attack, the attack is an attempt to penetrate regions surrounded the opponent marketing. Besiege maneuver is run by a massive attack on several fronts, so that the opponent must protect the front, side and rear at the same time. Challenger companies can market all what is marketed by competitors, and exceeding what is owned competitors, so that these companies do not offer consumers may be rejected. Surrounded the attack will succeed as an offensive strategy when the attacker has more resources than that possessed by the opponent, and when the attackers believe that the siege would be perfect and fast enough to break the opponent's defense.
Attacks Cross (Bypass Attack)
This type of attack is the strategy of attacking the most indirect and distanced himself from any movement that leads to a marketing area competitors. This attack was carried out by means of crossing the opponent and attack the weaker market that can be expanded resource base.
Especially for smaller companies, especially those who wish to attack the lack of capital markets, there are options available, namely the guerrilla attacks. Guerrilla war waged with small attacks and disjointed in different regions of the opponent.
The goal disturb and disrupt the opponent and finally obtain the right footing. In general, the guerrilla war conducted smaller companies against larger companies. Due to inability to launch a frontal attack and the attack effective, smaller companies such attack in a row with the short sale and rebates on some arbitrarily place in territory controlled by larger companies. This action is calculated to gradually weaken the power on the market. In this case, the attacker still must determine whether to launch a major attack or petty attacks and carried out continuously.
3. The market follower strategy
Many companies prefer to follow rather than challenge the market leader. Because followers are often the target of a major attack by the challenger, he should maintain low production costs, product quality and high service. There are four different strategies:
First counterfeiters, imitating round product and packaging leader. Secondly, pengklon, equaling or exceeding the product, the name, and packaging products leader. Third, impersonator, cheating a few things from the leader, but still maintain the differentiation of packaging, advertising, price, etc. Fourth, pengadaptasi, take the product leader and adapt or improve it.
4. Strategy filler market niches
In almost every industry, there are always small companies that specialize in some of the markets and avoid a clash with big companies. This small enterprises occupy "niches" markets they serve effectively through specialization, and that tends to be ignored major companies. Such firms bearing various names such as: tiller niche market (market nichers), a specialist market, the company doorway (threshold firms) or companies pedestal (foothold firms).
These types of companies are trying to get into one or more cracks secure market and definitely favorable. One niche or market niches will ideally have some characteristic that has a large enough area and enough purchasing power to be profitable, it has the potential to grow, neglected by large companies, the company has the skills and resources to meet the needs of the market niche effectively, the company is able to defend themselves from attack major competitors by fostering "Goodwill" on its products.
The basic idea in capturing this market niche is "specialization". Companies must have a distinctive expertise in terms of market, consumer, product or lines in the market mix. According to Kotler (1993) that there is some kind of specialization can be chosen: end-user specialist, specialist vertical level, certain specialist customer size, serve a special customer, serve a particular geographic region, product specialist or a particular product line, specialized products with special properties , specialists work orders, quality specialist / specific price, and specialist services.
Small companies that serve only a fraction of this market when the market is at risk of severe shrinking or attacked competitors. That is why better serve more than a niche market (multiple niching) and instead of only one (sigle niching). By developing strength in more than one niche of the market, companies can increase their ability to survive. Even some large companies choose the strategy of "multiple niching" rather than serving the entire market. The important thing here is that companies with a small market share can be profitable, and market niche strategy with dodgy tenants is one of the answers.
D. Analysis of the strengths and weaknesses of competitors
A company needs to collect information about the strengths and weaknesses of each competitor.
According to the consulting firm Arthur D.Little a company will occupy one of the six competitive position in target markets. First, dominant, this company controls the behavior of other competitors and has broad strategic choice.
Second, the strong, the company is able to take independent action without jeopardizing the long-term position and can maintain a long-term position of any actions taken by competitors.
Third, good enough, the company has the power that can be utilized and the opportunities that are above average to improve its position.
Fourth, enough, this company has performed at a level sufficient to achieve a satisfactory outcome can continue to maintain the business. However, this company exists because left by the dominant company and has a below-average chance to improve his position there.
Fifth, the weak, the company must change or otherwise, out of the market.
Sixth, there is a chance, this company has an unsatisfactory performance and there is no opportunity to improve.
In general, every company must monitor three variables when analyzing the competitors: the first market share (share of the market), the share of competitors on the target market. Second, share memories (share of mind), the percentage of customers who mention competitors in response to questions, "please say the first company in this industry have in your mind". Third, the share of the liver (share of heart), the percentage of customers who mention the name of a competitor in response to the question "please say more companies whose products you like to buy".
The world is changing rapidly, so is the mindset of consumers that require companies to be more creative and competitive. In addition, competitors problem must also be properly addressed. Some things to know from competitors: the completeness of quality, design and form of the product, the price offered, distribution channels or branch locations owned, run promotions, competitor activity plan ahead.
To know this information, then the company needs to conduct competitor analysis in a way; identify competitors, determine target competitors, identification of strategies of competitors, analysis of competitors' strengths and weaknesses, setting goals competitor, identifying competitor reactions and strategies to face competitors.
Of the activities that will be able to know: who our competitors, what goals they want to achieve, what strategy they are doing, what and where the strengths and weaknesses of competitors, what their reaction patterns, anyone who needs to be attacked first, how to attack, and Where competitors who need to be avoided in advance.
To deal with competitors, then we must know the strategy and the desired target competitors so we can follow up by issuing strategies that can break our competitors' strategies.
In general, the strategy of attacking the competitors consist of: a strategy to attack a weak competitor in advance, direct competitors to attack a strong opponent, the guerrilla strategy, and a strategy to survive. While the strategy for dealing with competitors can be done for the following positions: strategy market leader, market challenger strategy, market followers strategy, and market niche strategy.
Attack strategy that can be done against competitors there are five ways, namely: a frontal attack, the attack side, Siege attack, attack and attack guerrilla soar. As for self-protection in the form of defense that can be used are at least four ways: defense frontal, side defense, defense attack, defense and counter-attack.