What is Competitive Response

Today's business environment poses many challenges to high-technology enterprises in every segment of the industry. Not surprisingly, a large majority of these challenges are related to competitive issues. Telecommunications services companies, for example, are constantly adjusting prices and promotion bundles to keep up with each other, while customer switching costs are declining.

Companies in the consumer electronics industry are faced with ever-decreasing margins as competitors from overseas leverage low production costs to bring cheap substitutes to market. Furthermore, the pace does not show signs of slowing down. A recent study by A.T. Kearny found that "90 percent of technology and telecom executives in North America expect competition in their sector to intensify in the years ahead."

In this intense environment, simply having access to competitive information is not sufficient to effectively chart a course to success. Companies must adapt by infusing competitive awareness throughout their organization, and into every business process that deals with customers and products. The cycle of gathering external information, analyzing it, determining an optimal response, and then engaging the business to execute, is called the Competitive Response Lifecycle, and it is a critical process for companies of all sizes to understand.

Respond to changes

Competitive responsiveness, then, is the measure of a company's capability to respond to changes in external conditions and events. It includes the ability to improve performance by creating a repeatable process advantage over competitors.

Three recurring dimensions are used to measure competitive responsiveness:

• Speed
• Consistency
• Effectiveness

We have been fortunate to work on matters of competitive response with a large number of global leaders in the information technology and telecommunications industry. In doing so, we have found several competitive response best practices that all companies should implement. They are best understood in the context of a competitive response life cycle.

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