INCREASING COMPETITIVENESS

INCREASIN GCOMPETITIVENESS 

Competition requires a large amount of effort and business acumen: most businesses will, at some time, have to face circumstances that are exceptionally challenging and strenuous. There are a number of tactics and techniques that can help guide an organization through troubled times.

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The idea 

Many organizations are familiar with the challenge of maintaining productivity and profitability when the industry is threatened— whether that threat comes from global unrest, supplier shortages, or simply the presence of increasingly threatening competitors.

Among notorious examples of companies that have been unable to cope with such challenges, the case of Air France is a refreshing success story. The example of Air France is all the more impressive given the significant, continuing pressures faced by the airline industry. In common with other established carriers in Europe and North America, it found traditional markets threatened by increasing security concerns, the downturn in the airline industry, and the rise of low-cost carriers. To remain competitive, Air France paid special attention to four techniques:

• Reacting rapidly: Air France’s main decisions following the 9/11 crisis were taken on September 18, 2001; they were later adjusted and developed, but the new strategy was developed and implemented quickly. 

Acting collectively: the board meets to react quickly, considering how best to respond to events and how to coordinate its response. 

• Constantly looking at all competitors: this keeps the business lean and focused on what matters. In France, there has been an established lower-cost competitor since 1981—the TGV high-speed train. This has meant that many of the disciplines needed for competing with low-cost operators have been developed over many years. 

• Using all available resources: competing has meant employing all of the assets and advantages that a big industrial carrier has in order to counter low-cost operators—including brand, market position, and operational strengths. Often a competitor’s strategy is to build market share with temporary low prices and then to raise them. An active and patient approach can help to reduce or remove the threat of competitors.

In practice 

• Actively communicate your brand values—what it is that makes your organization and product special and preferable. 

• Benchmark your business against other organizations. 

• Meet with customers and understand their perceptions and needs. 

• Understand, strengthen, and preserve the causes of success in the business. 

• Find out why customers prefer you to your competitors. 

• Review competitors’ strengths and weaknesses regularly. Develop an action plan that, over time, will minimize these strengths and exploit weaknesses. 

• Develop and refine products and the tactics used to sell, taking into account your understanding of the competition.