Now we just have to start this one with the conflict between the concepts of 'Competition' and 'Competitor'. So "what" is competition and "who" is a competitor? The words highlighted in the question more or less give away their meanings.
Competition can be called a state which a player enters while fighting or rivaling with another player in the same segment of products for the same area and same share of the market.
whereas,
Competitor is an entity who is competing against another entity in the same marketing space, with a similar product and for the same market share as the other entity.
It can be noticed that in both the explanations, the common paradigm is the same market share and product. This means if the product and the market space being talked about for the distinct entities lie in comparable spaces, then and then only could it be said that the entities are in competition with each other.
The competitive scenario in a market can be properly analysed using Porter's model of 5 forces analysis. The relevant components have been highlighted for the reader:
3. Substitutes:
This here, is another force that may worry a marketer. Substitutes refers to products which might pose a threat from another which is almost identical and might prove to be a better selling one if the company selling it goes for aggressive pricing.
Here we can clearly see that Mc'Donalds is not getting displaced anytime soon. Though an obvious yet interesing fact is that 55% of the market belongs to non-major establishments!
As is customary with all the posts, I will try and close this on a lighter note. Mc'Donalds decision to move into India-excellent move if you are the owner of Mc'Donalds. However, for a person like me who does not really enjoy meals at the place (I may like a burger on an odd day, but I still do not enjoy one even if I like it..), it is a really heartening sight that a lot of stiff competition to Mc'Donalds has been seen in the market lately. Be it Cafe Pollo Campero, Darios, Rolls Mania-Mc'Donalds is being challenged openly in the Indian Market today. Despite this, Mc'Donalds has been, time and again, adopting great planning and campaigns and pricing strategies to maintain its image and customers in the market. This is one excellent reason why we are typing and reading Mc'Donalds here-because a student of marketing can discuss marketing in sufficient detail. After all, Mc'Donalds makes a great study case!
Will be back soon with something called PLC, ILC and BLC! Till then-Ameya S. S. logging off!
Competition can be called a state which a player enters while fighting or rivaling with another player in the same segment of products for the same area and same share of the market.
whereas,
Competitor is an entity who is competing against another entity in the same marketing space, with a similar product and for the same market share as the other entity.
It can be noticed that in both the explanations, the common paradigm is the same market share and product. This means if the product and the market space being talked about for the distinct entities lie in comparable spaces, then and then only could it be said that the entities are in competition with each other.
The competitive scenario in a market can be properly analysed using Porter's model of 5 forces analysis. The relevant components have been highlighted for the reader:
1. Industry (Segment) Rivalry:
The market in an industry might be already unattractive if the product already has strong substitutes and competitors. This might, more often than not, lead to a large amount of strife between competitors in the form of a war in terms of advertising and prices. A lot of ups and downs might be seen in such a market.
eg: Smokin Joes, Pizza Hut, Dominos, KFC, Burger King etc. along with Mc'Donalds would make up this segment of the fast-food market.
2. Potential Entrants:
Potential entrants in this diagram refers to local entrants into the business which bring in competition to the bigger fish. If the market is already very healthy with big players, a local brand might find it difficult to establish itself in the market. However, being locals, there is a greater understanding of the psyche of the customer which might prove a deciding factor.
eg: Mc'Donalds would face local competition from popular hubs like King Burger, Burger Barn, Katta, Hite Bar etc. Though these are not establishments large enough to take business away from Mc'Donalds, they have carved a niche for themselves and have a loyal customer base which keeps returning to them.
This here, is another force that may worry a marketer. Substitutes refers to products which might pose a threat from another which is almost identical and might prove to be a better selling one if the company selling it goes for aggressive pricing.
eg: Here, we can say that an upcoming fast-food joint (also offering similar combo meals) comes up and provides a combo at a lower price while maintaining quality on par with Mc'Donalds. Let us assume that the new company start offering discounts if you order a home delivery or order online. In such a case, it might happen that Mc'Donalds loses few of its customers to this new chain! And sometimes, a few might just be the beginning of a lot many. Though this would not be happening anytime soon, given the fact mentioned in the diagram below:
Here we can clearly see that Mc'Donalds is not getting displaced anytime soon. Though an obvious yet interesing fact is that 55% of the market belongs to non-major establishments!
As is customary with all the posts, I will try and close this on a lighter note. Mc'Donalds decision to move into India-excellent move if you are the owner of Mc'Donalds. However, for a person like me who does not really enjoy meals at the place (I may like a burger on an odd day, but I still do not enjoy one even if I like it..), it is a really heartening sight that a lot of stiff competition to Mc'Donalds has been seen in the market lately. Be it Cafe Pollo Campero, Darios, Rolls Mania-Mc'Donalds is being challenged openly in the Indian Market today. Despite this, Mc'Donalds has been, time and again, adopting great planning and campaigns and pricing strategies to maintain its image and customers in the market. This is one excellent reason why we are typing and reading Mc'Donalds here-because a student of marketing can discuss marketing in sufficient detail. After all, Mc'Donalds makes a great study case!
Will be back soon with something called PLC, ILC and BLC! Till then-Ameya S. S. logging off!
No comments:
Post a Comment