Meeting the Challenge of New Competition

In the old days, companies could easily sell products by offering the lowest price. In the new world, competition is increasing in both voracity and variety. Technological growth has enabled a swarm of niche retailers and service providers to enter the fray. Online start-ups spring up daily that don’t require the level of overhead that used to be the norm.

Niches

Niche competitors have changed the face of business. It seems like it’s been ages since the department store era was at its peak. Consumers would get their Sears-Roebuck catalog in the mail and use it to order whatever they needed. The department store industry met new competition in the 80s and 90s with the dawn of the specialty retailer. Now, a whole new animal has arrived: the online retailer.

Start-ups

Online start-ups have enabled consumers to get exactly what they want, when they want it. Providing an “adequate” and comprehensive product or service no longer will no longer cut it. Customers can easily find quality second hand goods online that once required touring the city for Saturday garage sales. Established companies must now be able to compete with small mom and pop shops to survive. If a company can’t stand toe-to-toe with both the scope and scale of the competition, it will soon find that it doesn’t have much ground to stand on.

The onslaught of start-ups can operate unconstrained by company history, policies, and baggage. They can flexibly adapt to the constantly changing business environment, and enter markets before established companies can even cover their overhead.

Start-ups hold no reverence to established norms and can effectively rewrite the rules, and create new methods of doing business that produce superior results. Additionally, start-ups are typically early adopters of new technologies. As great as technological growth can be for established firms, it can also pose unexpected challenges. It can be extremely difficult for managers to predict which of numerous competing technologies will prevail, and early adopters of winners can vault themselves into leaders.

Companies that innovate with new technologies can streamline customer interactions and raise customer expectations for the establishment. Whether it be a corporation that serves a niche consumer or product, or a brand new online start-up, established businesses must adapt to the new rules of the road.

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