Guide for SMEs on how to face online competition
Posted: Mon Dec 23, 2024 10:27 am
“If you know the enemy and know yourself, you need not fear the outcome of a hundred battles. If you know yourself but not the enemy, for every victory won there will be a defeat. If you know neither the enemy nor yourself, you will fail in every battle.”
The aphorism taken from Sun Tzu's The Art of War sums up the ideal relationship for facing competition in the market: knowing your own business in detail, but also knowing how your competitors work .
Today, the market is experiencing a time of multiple competitors constantly competing for the same space. If in the past, retailers had to worry about their neighbors in the canadian ceo email list same segment, today they need to be aware of the operation of an entire network of competitors, whether in physical or online locations.
In the latter case, of online stores , the field is even more mined, since the countless competitors are just a click away from the consumer. In this complex and dynamic e-commerce market, monitoring the competition, analyzing its supply and practicing dynamic prices are essential actions to remain competitive.
However, engaging in a more direct confrontation with the competition, such as engaging in an immediate fight for the lowest price, is not always the best tactic for growth and winning over new customers. In this sense, some more strategic actions, planned in detail, without distorting the principles of the business itself, must be implemented to be successful in the face of online competition. To better outline how this is possible, some of these measures can be seen below:
Read also: MANAGEMENT GUIDE FOR SMEs
Content
1 – Search
2 – Offer a good price, but without depreciating your profit margin
3 – Don’t be intimidated by big competitors
4 – Offer advantages to customers
1 – Search
Research may seem like an obvious suggestion, but e-commerce market research needs to consider several variables. Companies should analyze their customers' behavior, seeking to emphasize the positive aspects of their product or service. In addition, studying competitors with greater experience in the market can result in good ideas for improving, innovating and implementing differentiators that do not exist in the market.
The entrepreneur can also analyze which competitors are equivalent to his business and which can be considered inferior or superior. This research can be based on looking at what the competitor has that is attractive according to different variables: installment terms, shipping policies, promotions, advertising media, payment methods, presence on social networks , among others.
2 – Offer a good price, but without depreciating your profit margin
Certainly one of the biggest obstacles faced by e-commerce entrepreneurs is the reduction in the prices of products offered by competitors. However, offering the lowest price does not always help you stay competitive in the market.
Entrepreneurs must analyze the ways in which the competitor managed to offer a better price and understand whether the margin achieved was thanks to competence or whether it was the result of thoughtless action.
This last case, for example, can occur with adventurous entrepreneurs who, due to lack of planning, lowered their prices and are suffering losses. Similarly, a business that is about to go bankrupt may also offer a big sale to clear out its stock. In both situations, although the lower price may immediately attract customers, these businesses will not survive for long.
The best way to charge a good price while maintaining a significant profit margin is to know how to negotiate or have capital for investment. Entrepreneurs can reduce their prices by making better deals with suppliers or finding ways to reduce the cost of their operations. Another way to charge a more affordable price is for entrepreneurs to have a large amount of capital for investment, which can be converted into large purchases or improvements to logistics processes.
The aphorism taken from Sun Tzu's The Art of War sums up the ideal relationship for facing competition in the market: knowing your own business in detail, but also knowing how your competitors work .
Today, the market is experiencing a time of multiple competitors constantly competing for the same space. If in the past, retailers had to worry about their neighbors in the canadian ceo email list same segment, today they need to be aware of the operation of an entire network of competitors, whether in physical or online locations.
In the latter case, of online stores , the field is even more mined, since the countless competitors are just a click away from the consumer. In this complex and dynamic e-commerce market, monitoring the competition, analyzing its supply and practicing dynamic prices are essential actions to remain competitive.
However, engaging in a more direct confrontation with the competition, such as engaging in an immediate fight for the lowest price, is not always the best tactic for growth and winning over new customers. In this sense, some more strategic actions, planned in detail, without distorting the principles of the business itself, must be implemented to be successful in the face of online competition. To better outline how this is possible, some of these measures can be seen below:
Read also: MANAGEMENT GUIDE FOR SMEs
Content
1 – Search
2 – Offer a good price, but without depreciating your profit margin
3 – Don’t be intimidated by big competitors
4 – Offer advantages to customers
1 – Search
Research may seem like an obvious suggestion, but e-commerce market research needs to consider several variables. Companies should analyze their customers' behavior, seeking to emphasize the positive aspects of their product or service. In addition, studying competitors with greater experience in the market can result in good ideas for improving, innovating and implementing differentiators that do not exist in the market.
The entrepreneur can also analyze which competitors are equivalent to his business and which can be considered inferior or superior. This research can be based on looking at what the competitor has that is attractive according to different variables: installment terms, shipping policies, promotions, advertising media, payment methods, presence on social networks , among others.
2 – Offer a good price, but without depreciating your profit margin
Certainly one of the biggest obstacles faced by e-commerce entrepreneurs is the reduction in the prices of products offered by competitors. However, offering the lowest price does not always help you stay competitive in the market.
Entrepreneurs must analyze the ways in which the competitor managed to offer a better price and understand whether the margin achieved was thanks to competence or whether it was the result of thoughtless action.
This last case, for example, can occur with adventurous entrepreneurs who, due to lack of planning, lowered their prices and are suffering losses. Similarly, a business that is about to go bankrupt may also offer a big sale to clear out its stock. In both situations, although the lower price may immediately attract customers, these businesses will not survive for long.
The best way to charge a good price while maintaining a significant profit margin is to know how to negotiate or have capital for investment. Entrepreneurs can reduce their prices by making better deals with suppliers or finding ways to reduce the cost of their operations. Another way to charge a more affordable price is for entrepreneurs to have a large amount of capital for investment, which can be converted into large purchases or improvements to logistics processes.