Business Report-Competition And Company

Running Head: COMPETITION AND COMPANY 1

COMPETITION AND COMPANY

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COMPETITION AND COMPANY 2

INDUSTRY

According to O'Cass & Weerawardena (2009), the perception of a manager regarding the

environment of her industry has the ability to affect the marketing capability of the firm through

their deliberate responses to their discernment of the environment. The managers who recognize

their industrial market as turbulent will, therefore, acquire and develop superior marketing

strategies and plans to conquer or remain active in the market. The intensity of competition

influences the company’s types of strategy and characteristics that will drive the sells

performance of its brands (O'Cass & Weerawardena, 2009). Therefore, the company’s

heterogenic characteristics are explained by both the intensity of competition and types of

strategies (O'Cass & Weerawardena, 2009).

A firm‘s relevance, according to the RVB theory, depends on its resources and

capabilities (Nath, Nachiappan, & Ramanathan, 2008, p. 318). The ability of a firm to adequately

utilize its resources influences its productivity. According to RVB, firms have different types of

resources and capabilities; therefore, their market survival depends on their ability generate new

resources, utilize their skills, and invest in their existing know-hows (Nath, Nachiappan, &

Ramanathan, 2008, p. 318).

Factors influencing company’s market competency

1. company Strategic Orientation

Firms develop strategies according to their experience and attitude, change of a business

environment and, strategic goals developed (Koch, 2001, p. 351). A firm’s strategic location may

incline them to more, or less, of partnership with their opponents.

COMPETITION AND COMPANY 3

2. Learning

Learning is said to be a deterministic pursuit for innovativeness in a dynamic industrial

environment. Therefore, highly competitive companies learn from the market. According to

O'Cass & Weerawardena (2009), firms explore innovative ways so as to challenge their current

practices through learning their customers and competitor behavior. The effect of market-focused

learning, therefore, is the enhanced capacity of the company to design and create effective

marketing mix to influence its customers well.

Fig. 1. Conceptual Industry Marketing Framework: Adapted from, The effects of perceived

industry competitive intensity and marketing-related capabilities: Drivers of superior

brand performance. Science Direct, by O'Cass, A., & Weerawardena, J. (2009), 571-581.

The diagram can be summarized as market sensing, and integrating the acquired knowledge to

create market superior products. Therefore, firms that operate within a competitive environment

will develop diverse abilities in market learning and marketing (O'Cass & Weerawardena, 2009).

COMPETITION AND COMPANY 4

COMPETITION AND MARKETING

Competition, according to Weitz (1985), is the process by which sellers contend with

each other for customers in the market. Firms encounter competitors due to the existence of

substitutes in products and services. During the development of marketing programs is important

to satisfy customer needs and consider their response to products and services.

Business and markets have to face competition so as to give customers value and

satisfaction. A firm ought to be aware of a competitor’s advantage so that it can make necessary

adjustments in its marketing strategies (Leonidou, Kaminarides, & Panayides). Also, any

company needs to focus on competitor’s strategies and behavior so as to be aware of its

counteractive measures against future activities by the opponents (Leonidou, Kaminarides, &

Panayides).

Various companies have decided to introduce switching cost or brand loyalty to counter

completion. Here, a company’s market share is viewed as its future success. Switching costs

occurs when a customer who previously was purchasing goods and services from one company,

decides to move to a competitor’s product (Klemperer, 1995). The following are the categories

of switching costs illustrated with examples.

1. The desire for compatibility with the current existing equipment. Components of

computers system must all be compatible. A camera must be compatible with all its

replaceable components (Klemperer, 1995).

2. Transaction cost of switching suppliers. There are high operation costs in two banks

that offer similar accounts when a client wants to close one account and open with a

competitor bank (Klemperer, 1995).

COMPETITION AND COMPANY 5

3. Discount coupons and similar devices. An example is an airline company that gives

frequent flier packages and discounts them for repetitive travel with them. The

rewards convex in the distance traveled; hence customers receive only a small total

reward if they divide their custom (Klemperer, 1995).

COMPETITION AND COMPANY 6

References

Klemperer, P. (1995). Competition When Consumers have Switching Costs: An Overview with

Applications to Industrial Organization, Macroeconomics, and International Trade. The

Review Economics Limited, 515-539.

Koch, A. J. (2001). Factors influencing market and entry mode selection: developing the MEMS

model. Marketing Intelligence & Planning, 351-361.

Leonidou, L. C., Kaminarides, J. S., & Panayides, P. (n.d.). The International Marketing

Environment: Textbook Content versus Educators’ Views. Journal of Teaching in the

International Business.

Nath, P., Nachiappan, S., & Ramanathan, R. (2008). The impact of marketing capability,

operations capability and diversification strategy on performance: A resource-based view.

Industrial Marketing Management, 317-329.

O'Cass, A., & Weerawardena, J. (2009). The effects of perceived industry competitive intensity

and marketing-related capabilities: Drivers of superior brand performance. Science

Direct, 571-581.

Weitz, B. A. (1985). Introduction to Special Issue on Competition in Marketing. Marketing

Research, 229-236.

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Business Report-Competition and Company

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