Situation: Competitive situation

Hi, welcome to the twenty fourth day of The Leads Intellectual challenge: a 30-day challenge with Fatai Kareem. If you would like to know about unfavourable situation, read the twenty third day challenge here.

Today, he will be discussing another type of situation known as competitive situation and its application. Why do you always try to please your spouse? Why do you acquire many certificates? Why do companies strive hard to satisfy their employees? Why do companies continuously improve their processes? Why do companies engage in research and development and obtain patent for their products?

Well, understanding competitive situation will enable you to answer questions like the ones above. What is competitive situation?

Competitive situation is a situation in which two or more people are to compete for a resource that is relatively scarce such that when one person gets the resource, others are deprived. This situation is a product of scarcity, hence leads to competition.

This is a situation which shows how the relationship between two or more parties affect their performance or success such that when one party performs better or is more successful than other parties, other parties are negatively affected. It can be considered as a whole system which is equal to one. This system could be a market, an industry, an organisation, etc. Each party is taking its portion out of this whole system. And the aggregation of their portions makes up the whole system which is equal to one. Therefore, if one party has its portion to be one, then it gets the whole system while other parties are left with nothing, which is zero. 

In this kind of situation, the aim of each party is to force other parties out of the system, in order to get all the benefits of the system. If this can not be achieved, then it aims at having the larger portion in order to lead and stay ahead of other parties. This is where the idea of competitive advantage, disruptive innovation and unique selling point come into existence.

According to the theory of difference, a theory propounded by Fatai Kareem, if two things are the same, they are not comparatively important. That is, if there is nothing to differentiate two things, it will be hard to determine which one is better than the other and make a better choice. Therefore, every party strives hard to do things that can make them to be differentiated from its competitors. Thus, innovation, creativity and continuous process improvement are encouraged.

Following the principle of protective and preventive rule of the situation, every party aims at protecting its competitive advantage such that it is difficult for its competitors to copy it. Hence, making it to be unique among its competitors. Likewise, every party aims at preventing its competitors from forcing it out of the whole system. Hence, making it to remain competitive and grow its portion of the whole system.

To put an effective competitive situation in place, the following steps maybe helpful:

• understand the whole system. This will enable you to answer questions like: "what are things that function well in this system?", "who is leading the system?", "how does the system change?", "what brings about such change?".

• understand your position in the system. This will enable you to answer questions like: "am I new or established in the system?", "what is my portion of the system?", "what makes me different from my competitors?".

•.understand the kind of relationship that exists between you and your competitors. This will enable you to answer questions like: "what are my competitors doing that is limiting my growth?", "what kind of improvement will set me apart from my competitors and make me to grow?".

• determine how you can protect your competitive advantage. This will enable you to answer questions like: "what can I do differently that will be hard for my competitors to copy?", "which resource can I acquire to be unique?", "how do I protect my trade secret?".

• determine how you can prevent your competitors from forcing you out of the system. This will enable you to answer questions like: "what can I do that will always be needed, but can not be gotten elsewhere?", "how can I remain competitive and grow?".

• implement continuous process improvement and quality cycle. This will enable you to remain competitive and better. This will enable you to answer questions like: "how can I always do it better?", "how can I standardise the best practice and keep improving upon it?".

Case study

1. JKLM company produces product J which is a substitute of product X produced by XYZ company. JKLM company wants to increase its revenue by raising the price of its product above its competitor's. How will this affect JKLM company? What can JKLM company do differently to achieve its goal?

2. Faruq, a new graduate with first class honour in Accounting, is hopeful that he is going to get a good job and puts in for a vacancy. If he is the only one applying for the job, how is he likely going to get the job? If there are many applicants like him, how is he likely going to get the job? If he is the only first class holder, how is he likely going to get the job? If other applicants are chartered accountants while he is not, how is he likely going to get the job?

3. BCD PLC, the only producer of plastic products, receives a news that another company is about to start producing plastic products in its locality. How is it going to affect BCD PLC?

Disclaimer: All names used are for illustration purpose.

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