Competition in the marketing sphere is determined by market rivalry between various legal entities and individuals, that is, enterprises, manufacturers, consumers. In fact, competition is found everywhere - between individual countries, sectors, goods, and entities. Various methods are used to analyze competitive forces. Most often, when analyzing the operation of an enterprise, M. Porter's competitive strategies are used.
Is competition good or bad?
Competition creates a difficult market situation for manufacturers of various goods and services, and also creates circumstances that can lead to a dangerous situation. This may be unexpected surprises in the format of a sharp drop in demand, and the appearance of innovative products with undeniable advantages among competitors.
Trying to reduce risks, enterprises use special techniques. They are united by the term "competitive analysis", which is a study of the competitive situation and assessment of the advantages inherent in the company and rivals working in the same market. At the heart of the task is to establish the advantages of the company or its products and evaluate the possibilities for maintaining advantages in specific conditions. As a way to achieve, a Porter matrix can be used.
Speaking of competitive advantage, we are talking about superiority over competitors. The presence of advantages in comparison with competitors is associated with the creation of a group of measures in the direction of goods, distribution, incentives, prices. In marketing, competitive strategies are aimed at maintaining the company's market share or at increasing it.
Increasing competitiveness with Porter
Speaking of basic strategies, it is important to understand and be able to apply M. Porter's competitive strategies. There are three types of them:
- Leading in cost reduction. Choosing such a strategy, the organization directs all its forces to create the lowest possible costs. This allows you to bring to market the goods with the lowest cost, while maintaining the appropriate quality.
- Focusing. In this situation, the company focuses all its attention on a specific market segment.
- Differentiation. When choosing this strategy, the organization directs all efforts to create a unique product, due to which it differentiates from organizations producing such a product.
Porter's Matrix - The Way To Company Success
In order for success to accompany the company throughout its activities, it is important to focus on competitors. To systematize and refine the strategy of their work, the Porter matrix is recommended. It is she who helps to find weaknesses and attack them with marketing techniques.
The Porter matrix is a model that reflects the real state of surrounding competitors in a specific time period. Its components are power from suppliers and consumers, the emergence of new competitors, the withdrawal of substitute products and competitive relations between firms in the same industry.
To understand how Porter's matrix is ideal for market analysis, using the example of the Bryanskpivo organization, we can consider all the subtleties of its formation.
Analog Manufacturers
The main competitors of Bryanskpivo OJSC are Cheboksary Brewery Bouquet of Chuvashia OJSC and Solodovnya LLC. The distribution of the rye malt market among competitors in the market is as follows: OJSC Bryanskpivo - 37%, LLC Solodovnya - 25%, OJSC Cheboksary brewing company Buket Chuvashii - 12%, OJSC Novoaltaysky bakery - 8%, Iskitimsky Bakery - 5%, Sursky Malt LLC - 5%, Concentrate LLC - 5%, Soproduct LLC - 2%, Other manufacturers - 1%.
The competition in the market of rye malt is quite substantial. The main competitor for the enterprise is Solodovnya LLC, which occupies 22% of the market. JSC "Bryanskpivo" has a fairly extensive experience, has the largest working capital. This company is also quite large and, acting in various market segments, occupies a leading position.
To assess the competitiveness of JSC "Bryanskpivo" in terms of product and pricing policies, as well as product distribution policies, use the method of integrated assessment. The methodology is based on a comparison of criteria of importance and evaluation. The higher this indicator, the better the competitive situation of the organization in its sector.
JSC Bryanskpivo occupies a rather large market share. Porter’s matrix shows that he should not forget that having significant advantages over competitors now, tomorrow the company may fail. For example, a decrease in profits, a decrease in market share and even bankruptcy. Therefore, the plant management needs to constantly carry out activities to strengthen its strengths and reduce weaknesses. It should be noted that the position of the plant is quite stable, but nevertheless, the actions of competitors should be taken into account.
Buyers
When selling its products, the enterprise primarily focuses on domestic buyers, which becomes clear when the Porter matrix is studied. The competitive advantages of the enterprise are based on increasing the client base of Bryanskpivo OJSC by customers from near and far abroad. They are wholesale organizations, producers of bread, chips, KKS, improvers and other companies for which the level of quality of rye malt is important.
Suppliers
To determine the feasibility of cooperation with regular suppliers, it is necessary to analyze their prices for the supplied raw materials and resources. Investsnab LLC is a reliable supplier of rye in the Bryansk region. Also, Bryanskpivo OJSC has repeatedly acquired rye from RosExport LLC (Samara) and RusAgroTorg LLC (Kursk). These suppliers are the largest in Russia and sell exclusively high-quality raw materials produced in accordance with the highest standards. Thanks to this, Bryanskpivo OJSC creates premium class rye malt, which is valued both in Russia and abroad.
Potential Analog Manufacturers
The level of entry barriers to the rye malt market is quite high. First of all, this is due to the fact that almost 80% of the market is occupied by 3 large enterprises. Significant economies of scale prevent small producers from competing with market leaders. An important aspect is that with any attempt to withdraw a cheaper offer, existing players reduce prices.
Substitute Products
First of all, Bryanskpivo OJSC should be wary of competition from producers of malt concentrates. They cover a significant part of the market, including mini-bakeries and end consumers.
In analyzing the rye malt market, the Porter matrix of five competitive forces was used. She showed that JSC Bryanskpivo occupies a leading position in this market. First of all, this is due to the fact that only Bryanskpivo OJSC uses drum technology in the production of rye malt, as demonstrated by the Porter matrix. An example of building a model allowed us to see that the equally important indicators of the success of the enterprise are the wide geography of supplies, the presentation of useful information on the official website and good reputation.