Competitive response

Hi Ashutosh,

I have replied to your questions below.

1) In general you have three ways to provide a counteract competitors: (i) create a partnership that is mutual beneficial; (ii) fight against them, either on your current product or with new products; (iii) leave the market or segment. Stealing the competitor’s management will be one of the possible solutions to satisfy option (ii). You can do this for two reasons:

• to find resources you could not otherwise find and/or
• to decrease the strength of a competitor.

You can find a similar example in what football teams do when they buy the best football player from a competitor in the same league – they both manage to acquire a resource they could not find otherwise and make the competitor weaker.

2) As Vlad said, it means to reposition your product/service offer to people available to spend more (upmarket) or less (downmarket)

3) There are several things you should consider:

• Is the new product really competing with you? Sometimes an apparently competing product won’t really affect you since it is directed to a different customer based or has different features/price/distribution channels
• Is the new product going against your goal? Maybe the new product is marginally affecting your revenues, but the market is growing so much that you would still meet your long-term expectations in terms of your target objective
• In case you react, you should consider one of the options under point 1

3) You should suggest inaction so far that the client would achieve his/her goal doing nothing (eg goal is to keep current revenues as they are, and in the end the competitor won’t affect us in revenues). Most of the time though you should at least mention long-term risks of inaction; also, generally speaking, inaction is a very rare conclusion in competitor response cases.

Best,

Francesco

This sounds interesting. What is the case called?