Have competitive strategies become broken?

Reflecting on the last ten years one has to ask toward the end of the boom did companies engage too heavy in competition and as a result did growth / innovation suffer?

Rather than businesses opening in regions where competition was low for example, the tendency it would seem was for Aldi in the supermarket industry, for example, as close open a store as close as possible to Lidl. As this practice became more apparent natural defensive strategies such as buying up other prime real estate to circumvent competition moving in also became the norm. Companies got so bogged down in innovation to keep existing customers rather than focus that same effort to grow a market differential.

With this fundamental shift in economics, the new focus it could be argued, now needs to be on niching and craving out new market sections that as a business you can become the market leader in rather than fighting to keep market share in diminishing markets.

Innovation and doing one thing amazingly instead of everything being just being the same as competitors and frankly average is no longer an option to do business. Is manager ego and sticking to proven strategies that worked in a business climate different to what we face today a sure-fire way to get washed away in the recession cleansing?

2 Responses to Have competitive strategies become broken?

  1. Aindreas says:

    Nice post.

    The Aldi and Lidl examples are interesting ones – one would have to speculate whether or not they have a strategic alliance or some form of cartel/collusion going on. Both stores stock items depending on the regions and what you can’t get in one, you can get in the other. It’s interesting and if you think about it, they are so on top of their game in terms of sourcing goods and pricing strategy not to mention the fact of economies of scale – irish retailors couldn’t possibly compete or keep up with them and that’s down to the fact that Germans by their very nature are incredibly systematic and efficient people (wars etc)

    Niche markets are the way forward in my opinion, the difficulty with them (in Ireland) is if the market is new or unheard of – anticipating demand etc can be difficult. Another potential issue is judging the size of the niche and whether it is worth attacking or not.

  2. Aindreas says:

    Forgot to mention, Lidl and Aldi are seperately owned by some of the richest men in Germany.

Leave a Reply

Your email address will not be published. Required fields are marked *