Competition threats are factors in the external environment that may inhibit your business from achieving its goals. Right now, your business may be in the thick of competition, with everyone elbowing each other and struggling to be the other's frontrunner. Sometimes, we all tend to think that experiencing competition is unfair and that the rivalry should just go away. However, having competition around is actually a good thing for any typical business.
Competition drags your business to its level best. Usually, having that challenge right on your heel pushes you to run your business faster, harder and thinking deeper. It is also an expectation that you will learn a lot from your business failures and successes. Therefore, competition just makes the game more interesting and a whole lot more fun. Here are a few strategies that could help you alleviate it.
Whenever establish a payroll software developing company, it is worth noting that there are other well established competitors already in the industry. Rather than jumping on whatever trend they are touting, being innovative and creative make much more sense. You are supposed to come up with new ideas based on your unique experiences as a creative business entrepreneur. After doing that, develop a software that can perform a unique, distinct or comprehensive task either easily or efficiently. Your competitors may own super budgets and hundreds of knowledgeable employees but never dwell on that. Harness their lack of passion or technical knowhow to develop something absolutely unique. They have no such experience like you have or even lesson that you have learned. This is what you leverage as your competitive advantage.
Ignoring the existence of competitors is very critical to your business success. In 1990, Patriot software, a security software company created products that were similar to those of IBM. IBM wasn't concerned because they were leaders in that particular industry. They ignored their existence and assumed that a lot of customers would clearly see the distinction in quality. However, after 2 years of customer loyalty, IBM realized that it was losing its customers to its close competitor, Patriot. The company therefore differentiated its software products as well as boosting its marketing approaches. This situation taught IBM that they should always overcome competition by strategically differentiating, upgrading and inventing new products instead of just ignoring their competitors just because they are industrial leaders.
Acquisition occurs when a business enterprise purchases another. Major advantages associated with acquisition include increased economies of scale, combined technological approach and expanded market. When a company acquires another, there is increase in size of the merged entity, leading to economies of scale in terms of production of larger quantities of goods in each production cycle or reduced expenses due to bulk buying. This is what give merged entities competitive advantage. The resulting entity will definitely experience an expanded market and reduced expenditure compared to its competitors.
The entity will also manufacture quality products as its capability will be influenced by the economies of scale. This has been the case with Blue Coat, a software security vendor owned by Bain Capital Inc. The company, specialized in giving organizations visibility to encrypted web traffic flow through their data centers, is making a move to acquire Elastica. Elastica is a small start-up enterprise that makes software products that detects potentially dangerous use of cloud applications. Together, the two companies aim to expand their products capacity in the field of cloud computing to reduce competition with their closest rivals, Netskope and Skyhigh Networks. Every time your business experiences competition, it is worth learning to deal with it in an advantageous way.