On Deploying Resources

Introduce Products that Can be Defended

As your company penetrates a market, consider each product that you introduce in terms of how it can be defended against the competition, or used in selling situations against them. You never want to be in a position in which you are competing uphill against the strong points of a competitors product.

A competitor is most vulnerable when it is in the process of changing from one distribution channel to another. But wait until he has just completed the transition, but not yet finishing training the salesmen in the new channel to sell the product.

Over time, products may become less competitive in the marketplace. Take care that you introduce products at a rate which prevents your sales force from becoming demoralize from increasing loss of sales to your competitors. There is no substitute for a healthy salesforce.

Minimize Vulnerability to Competitors

Try to minimize the vulnerabilities of your company to your competitors by presenting a strong image of the strong points of your company to the world at large in both your advertising and public relations.

Avoid Hazardous Markets and Accounts

There are certain types of accounts that you do not wish to do business with, there are certain customers that you should not sell to.

  • Doing business with the U.S. military makes many demands upon a company. In some cases, it will be best to decide not to accept military business.
  • Selling to small customers who require a large amount of service and support. As a company, you may not be able to afford to handle very small customers, and will have to refuse to do business with them.

Encourage instead for your competitors to have these accounts and customers. They will become less able to compete with you in your chosen markets because their energies will be diluted.

Consider carefully the behavior of your competitors in the market. When a competitor is making considerable noise and challenges, they are trying to get you to compete with them on their own terms.

  • This has traditionally been the issue between PCs and Apple. The PCs focus on the technical merits of their hardware. Apple has focused on its simplicity and ease of use.

Be very careful of entering markets that are complex or changing rapidly. These markets offer your competitors to gain intelligence from your disclosing information to a customer to which they have a close relationship, or by being able to introduce a product which makes yours uncompetitive in the market.

  • Japanese manufacturers have repeatedly tried to enter the U.S. disk drive market. But the rapidly changing dynamics of the market have made it very difficult for them to be successful.

Be Aware of Changes in the Market

Be very aware of changes in market conditions as evidence of the actions of your competitors. For example, are prices rapidly decreasing for a particular commodity item? A competitor may be attempting to gain in market share by special incentives or price reductions. (Need to expand).

Examine closely the behavior of employees of your competitors. Study the parking lots of their buildings to learn how many hours workers are devoting to their jobs. What is the behavior of their workers in social situations? Are they attempting to cover their insecurities with strong statements? If the company lacks a well defined focus, the CEO may be ineffective.

Be aware of warning signs. Are companies laying off workers? Do they lack the funds to market a new product?

Command, Discipline, and Humanity

Avoid vacillation and fussiness. Workers must be attached and loyal to a company, before control can be imposed by strict discipline. Be consistent, trustworthy, and fair.

Remember that technology and the size of a company are not nearly as important as positioning. Correct positioning requires that you correctly understand your competition and its products and have focused your efforts in a manner which exploits their weaknesses.

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