Foreign Trade: How to identify competition?

When a company makes the decision to market its products on the international market, it should consider that it will have a greater variety of competition than might exist on the domestic market. This is how products that competed with other equals, similar or substitutes in the domestic market, will face at the international level, a greater presence of them, whether coming from the destination market, the market of origin itself or from other countries, a reason whereby the company will need a broader identification of its competence.
In this regard, it is important that companies monitor competition activities and assess on the basis of their objectives, the impact they wish to achieve with their operations.
To do this, it will be necessary to carry out a competitive analysis by evaluating:
  1. How many and what are the main competitors
  2. Where they are located
  3. What are its markets
  4. What are your trading strategies
  5. What are their prices
  6. What is your production capacity
  7. What are your sales channels
  8. What are your customer services
  9. What are your strengths and weaknesses

Competition classification

The competition can be classified into:
Direct Competence. They are companies that compete with products and/or services equal to or almost equal to the product and/or service exported. Companies must compete in the same products and/or services, in the same objective market and geographical scope of action.
Complementary Competence. They are companies very similar to the exporter since it basically markets the same products and/or services, in the same or different objective market and different geographical scope of action.
Supplemental Competition. They are companies whose products and/or services have some kind of relationship with those of the exporting company, since they seek to meet the same needs differently from the product and/or service exported. An example of this type of competition is between fizzy drinks and packaged fruit juices.
The analysis on competition is not intended to determine what the company should copy or imitate, on the contrary, it is a benchmark for knowing what to do differently and better – the unique blend of value – than its competitor , to win a position on the target market.
Written by GRISKA

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