1. Competition is a critical micro business factor that affects the operations of an organization. Businesses operate in competitive business environments that affect their business strategies, pricing, quality of products, and product safety measures. Most companies perform market competitive analysis to compare their offerings and prices to those of competitors (Porter, 2011). The ability to understand a firm’s competitors helps a company design competitive strategies so as to maintain competitiveness and sustainability in the market.
Competitive advantage is build by increasing production quality, customer services, and operational efficiencies by an organization. Competition in the market impacts on the prices charged on products by businesses. The extent of competition in the market determines the amount of prices set by companies (Mayer, Melitz, & Ottaviano, 2014). This means that where there is stiff competition, a company lowers its prices to gain a competitive advantage and win more customers over its rivals.
Also, the level of competition in the market affects the range of services and nature of products offered by an organization to the market. More competition leads to increased quality of goods and services by a firm in an attempt to attract and retain more customers (Brown & Osborne, 2012). For instance, organizations that sell inferior products to that of a competitor struggle to make reasonable sales in the market unless they lower prices.
Gaining a competitive advantage against the rivals is the primary goal of every firm in a given industry. Organizations design competitive strategies that can benefit their customers hence clients retention (Porter, 2011). Therefore, organizations must strengthen production and customer service qualities to gain competitiveness and sustainability in the market.
2. Organizations operate in changing marketing environment. Marketing involves understanding clients needs and demands with an anticipation of the potential shifts in the future. Lack of response to business troubles contributes to organizational failure (Brown & Osborne, 2012). The management of organizations needs to take best responses on the changes in the marketing environment to enhance competitive advantage in the industry.
Customers tastes and preferences regularly change. The organization needs to conduct annual strategic planning that addresses changes in customers behavior. The fact that the world is getting richer shows that modern customers demand more sophisticated products. The marketing management needs to produce high quality and technology made products that suit consumer preferences (Brown & Osborne, 2012). This would help in retaining customers hence increased competitiveness.
Changes in technology lead to marketing environment changes. It is the responsibility of marketing management to update their marketing technologies so as to meet broader markets. For instance, the use of online marketing through the social media. The use of current marketing technology by an organization plays a vital role in customer attraction hence maintaining competitiveness in the market (Porter, 2011).
Further, an organization needs to recruit skilled, experienced, and qualified marketing personnel who are imaginative. In the event of new offerings in the market, having talented and competent personnel helps in creating and innovating new ideas of developing the new product. Product modification would assist an organization acquire more customers and hence withstanding demand changes in the market (Hussain & Ilyas, 2011). As a result, customers remain happy and loyal to the organization hence enhancing competitive advantage over the rivaling firms.
Brown, K., & Osborne, S. P. (2012). Managing change and innovation in public service organizations. Routledge.
Hussain, M. F., & Ilyas, S. (2011). The environment for innovation: Gaining competitive advantage. African Journal of Business Management, 1232-1235.
Mayer, T., Melitz, M. J., & Ottaviano, G. I. (2014). Market size, competition, and the product mix of exporters. The American Economy Review, 495-536.
Porter, M. E. (2011). The competitive advantage of organizations: creating and sustaining superior performance. Simon and Schuster.