Continuation on Principles, Tools, and Techniques in Creating a Business…..

Competition
It shows that weak competition is one of the fundamental factors that explain limited growth,
productivity, and employment in the economy. Philippine experience has shown that reforms such as
trade liberalization, deregulation, and privatization, while necessary, are not sufficient to foster
effective competition. The success of these reforms depends on the creation of a competitive
domestic market environment; which is in turn determined by the interplay of behavioral, regulatory
and structural constraints along with the broader aspects of competitive infrastructure. With the
removal of many regulatory barriers, the economy is already substantially open. However,
competition in many industries has remained limited due to structural factors such as large capital
and economies of scale requirements, lack of middle and medium enterprises leading to a hollow
industrial structure, and weak linkages of SMEs with large enterprises. In agriculture, regulatory
barriers still exist while in infrastructure, the capacity and independence of our regulators are still
evolving and need to be strengthened. Maintaining a competitive environment requires coordinated
policies to implement continued liberalization and deregulation in tandem with the necessary support
measures that will address the structural obstacles to the entry and growth of domestic enterprises.
These efforts should be pursued jointly with well-functioning competition and regulatory agencies.

Technical Marketing Techniques

There are four marketing techniques that you can use to approach your market with your
products and services. Use these to market your products better than your competition. The better
you market to your customers, the greater your success in business and sales. Use these tricks to get
ahead of your competitors.

1. Create Utility and Usefulness with Your Product

The first marketing technique you can use to beat your competition is to create utility,
usefulness, and satisfy the needs of your customers to achieve a specific result. This requires that you
offer them something they need and can use to accomplish their other goals.
Look at your market today. What will your customers and potential customers want, need,
and be willing to pay for in the months and years ahead? What are the trends in customer demands in
your market? If you can answer this accurately, you can often leapfrog over your competition and
dominate a new market even before it emerges.

2. Change Your Pricing

A second approach to sales and marketing is by changing your pricing. By bringing your
goods and services into the price range of your customers, you can open up entirely new markets that
do not today exist. How could you price your products or services so that more customers could
afford to buy them?
Many companies have been able to achieve market leadership by focusing on bringing their
prices into the affordability range of more customers. What we have found is that the greater your
market share, and the lower your cost of production, the lower is the price that you can charge.

3. Emphasize Your Product's Key Benefit to The Customer

The third strategy in sales and marketing is adapting to the customer's reality, both social
and economic. The ultimate aim of your marketing plan is to make selling unnecessary. But this is
seldom achieved. The product almost always needs to be sold to the end customer. As it turns out,
each product offers a "key benefit" that is the primary reason why the customer would buy.
Each product or service also triggers a "key fear," which is what holds the customer back
from buying the product or service in the first place. Customers are terrified of risk. They are afraid of
paying too much, getting the wrong product, losing their money, and getting stuck with something
that is inappropriate for their purposes. This is the main reason that qualified prospects hold back
from buying any product or service, at any price.
When you can emphasize the key benefit, the unique added value that a customer will
receive by buying your product or service, and at the same time take away his or her major fear, you
can open up an enormous market for what you sell. What is the key benefit that motivates your
customer to buy? If you have different types of customers, what is the key benefit that triggers the
buying decision in each of these different kinds of customers?
What is the key fear that holds potential customers back from buying your product or service?
What could you do to emphasize the benefit and make it more attractive, while at the same time,
minimize or eliminate the fear that causes a customer to hesitate?

4. Deliver True Value of Your Product to Your Customer

The fourth approach to marketing plan is for you to deliver what represents "true value" to
the customer. True value is something that can only be identified by working closely with your
customers.
What represents true value to your customers? How could you structure your product or
service offerings in such a way that people would be more comfortable purchasing them from you
rather than from your competitors?
There will always be competition for products and services. It is your job to make sure that
you stay ahead of the game and ahead of your competition.

Methods of Competitive Advantages

Businesses are constantly seeking competitive advantages in the market-place. There are
many different ways in which this can be done, but many will focus on a few tried and true methods
of gaining a leg up on the competition. These methods can generally be classified into about four
different primary categories. Both Stanford University and the University of Cambridge cite Michael
Porter's broad and narrow categories of competitive strategies as the basis for understanding how
businesses try to compete.

Cost Leadership
Cost leadership is the first competitive advantage businesses often attempt to gain. Cost
leadership as an advantage occurs when a business is able to offer the same quality product as its
competitors, but at a lower price. Cost leadership can occur when a company finds ways to produce
goods at a lower cost through the perfection of production methods or by the utilization of resources
in a more efficient manner than competitors. Other factors, such as proprietary technology, can also
factor into this type of advantage. Cost leadership may be classified as an offensive strategy, whereby
businesses attempt to drive competitors out of the market by consistently using price strategies
designed to win over consumers.

Differentiation
Differentiation is a second strategy that businesses often use to set them-selves apart from
competitors. In a differentiation strategy, low cost is only one of many possible factors that may set
aside a business from others. Business that differentiate themselves typically look for one or more
marketable attributes that they have that can set them apart from their competitors. They then find
the segment of the market that finds those attributes important and market to them. The process can
also work in the other direction with businesses conducting research to determine which things
consumers find most important and then developing a niche market for those products or
characteristics.

Defensive Strategies
Another way for a business to gain a competitive advantage is to utilize a defensive strategy.
The advantage gained by this type of strategy is that it allows the business to further distance itself
from its competition by, in some sense, maintaining a competitive advantage it has gained. Therefore,
this strategy is closely related to differentiation and cost leadership because it is a method used by
businesses to keep those advantages in place once they have been attained. Whereas the other two
strategies are more offensive in nature, this strategy becomes an actual advantage as it becomes
increasingly difficult for so-called competitors to offer any real opposition to the business.

Alliances
Competitive advantages can also be gained by businesses that seek strategic alliances with
other businesses in related industries or within the same industry. Businesses have to be careful not
to cross the line between alliances and collusion, though. Collusion occurs when businesses within the
same industry work together to artificially control prices. Strategic alliances, on the other hand, are
more along the lines of joint ventures that businesses use to pool resources and gain themselves
exposure at the expense of other competitors not in the alliance.

Types of Business Competition

The goal in business is to make a profit by selling a product or service. In most situations
several companies will be competing for sales and the market share.
This competition can range from performance competition, where each company does its
best to win the hearts and minds of the customers, to a head-to-head competition, where a company
will not only seek to do better than its opponents but will also try to prevent the competition from
performing well.

Performance Competition
Many companies are aware of their competition but are mainly concerned in their
immediate business, getting customers and satisfying those customers.
By providing good products and services, these companies hope to be successful and even
lead the pack. Marketing and making the customers aware of their products and company is also
done to improve their business performance.
By using Total Quality Management (TQM) or Six-Sigma methods and conforming to the ISO
9000 Standards, a company can enhance their ability to make quality products and have a well-run
company.
Many companies are aware of their competition and their position in the marketplace, so they simply
try to do their best to meet their customers' needs. In this case, "the cream rises to the top."

Head-to-Head Competition
In some cases, companies will compete directly with their top competitors. They will not only
try to perform well, but they will also try to make it difficult for their opponents to do well. Since the
opponents may be also using such tactics, they will need to use good defensive measures to deflect
the attacks.

Controlling Supplies
One way in which a company can deter their opponents from doing well is to try to control
the supplies. By outbidding in vital supplies or controlling suppliers can be done to hinder the
opponents. However, make it sure that suppliers will benefit from your business if you want to
control them.

Advertising
Marketing and advertising sometimes employ negative ads about the competitors. The best
ads indicate lack of quality of the competition through the use of implication. For a long while Miller
Lite and Bud Lite beers had their own advertising campaigns, each touting the advantage of their
individual brand. But then in 2004, Miller went head-to-head against Budweiser in their marketing.
Miller commercials showed Bud Lite being replaced by Miller Lite. This brought about abattle with
each attacking the other's brand.

Distribution
Controlling the distribution of products is another method of deterring the competition. Beer
and beverage companies will gain contracts to be the sole distributor at ballparks.

Predatory Competition
Large companies have been known to buy out smaller competitors. Or they may simply make
it difficult for the company to stay in business. Microsoft was known to squeeze out small competitors
by forcing computer stores not to carry those products.
Lawsuit is another way a large company can stifle smaller competition-real or imaginary.
Some small companies have been put out of business simply because their was an inkling of
competition.
 Other business companies have been known squeezing out small stores in the area, as well
as for bullying suppliers into cooperation with their needs. Although the public frowns on such tactics,
they still flock to these business establishment because of their low prices.
Often several companies will be competing for sales and the market share. A common type is
performance competition, where each company does its best to win customers. Head-to-head
competition is where a company will not only seek to do better than its opponents but will also try to
prevent the competition from performing well. Large companies may use predatory competition to
assure their top position.

Supplier
Suppliers are party that supplies goods or services. A supplier may be distinguished from a
contractor or subcontractor, who commonly adds specialized input to deliverables. Also called vendor.
Supplier, is a supply chain management term that means anyone who provides goods or
services to a company or individuals. A vendor often manufactures inventoriable items, and sells
those items to a customer.
Suppliers are individuals or businesses that provide goods or services to vendors in return for
the agreed upon compensation. As such, suppliers do not generally interact with consumers directly,
leaving that task to vendors or shop owners. It is not unusual for a supplier to provide volume
discounts to vendors when they agree to sign long-term contracts or place orders for large quantities.
There are suppliers found in just about any type of profession that can be imagined.
Wholesale suppliers are very common in the retail industry, where they are likely to manufacture and
deliver large quantities of products to their client. Supply companies also work in niche markets as
well, such as importing and exporting packaged foods, ethnic or cultural goods, or any other range of
products that have a small but reliable demand. In general, exporters of this type will handle all the
details for shipment and delivery to the vendor, and include the associated costs in the final charges
issued to the client.
One of the main strategies of suppliers is the creation of volume discounts for vendors who
place orders for large quantities of a specific good or service. In many cases, the discounts are
structured as tiered pricing. That is, the supplier will charge a fixed price per unit if the order is for up
to a thousand units, but offer a specific discount if the order is for between 1001 and 2000 units. A
higher tier discount is applied if the order is between 2001 and 3000 units, followed by an even higher
discount if the order is in the 3001 to 4000 unit range, and so on.
Some suppliers choose to make the discount a little simpler by applying a fixed discount that
applies to any order quantity over a certain number of units. Other suppliers prefer to go with
discounts issued to customers who are willing to enter into contracts that feature a duration of two to
five years and commit the vendor to order a minimum number of units between the beginning date
and ending date specified on the contract. Should the vendor fail to purchase that minimum number
of units during the life of the contract, the supplier has the option of going back and charging
penalties of some type.
Suppliers rarely rely simply on competitive pricing in order to secure steady clients. Along
with price, they also tend to strive for quality, an attractive range of goods and services, quick
response to customer queries, and timely delivery of the products once the order is placed.

Impact of Suppliers to Business

Hereunder are some of the impact of suppliers to one's business:

1. Quality
Supplier components can positively or negatively affect the quality of your product. Higher
quality increases customer satisfaction and decreases returns, which adds cash to your bottom line.

2. Timeliness
Their timely deliveries are crucial to how customers view your reliability. A quick turnaround
can become the key to minimizing your inventory, which in turn translates to less risk of inventory
obsolescence and lower cash needs.
3. Competitiveness
They can give you the one-up on your competition based on their pricing, quality, reliability,
technological breakthroughs and knowledge of industry trends.

4. Innovation
Suppliers can make major contributions to your new product development. Remember, they
live their product more than you do; they're working to be on the cutting edge of innovation for their
product. The good ones will understand your company, its industry and needs, and can help you
tweak your new idea.

5. Finance
If you've proven to be a considerate, loyal and paying customer, you may be able to tap into
your suppliers for additional financing once you hit growth mode or if you run into a cash crunch. That
financing may take the form of postponed debt, extended terms on new purchases, a loan, or an
investment in your company.

All of these improve your cash position.