How Do Low Cost Competitors Play the Game

Are you facing low cost competitors in your markets? 

Do you have a good understanding of how they operate? 

Are you exploring adjustments in how you operate in order to compete effectively?

Thinking about your answers to the following questions may help you identify some strategies you should be considering:

1. Are there opportunities for you, or new competitors, to radically change the business model in your industry or in a segment of it?
2. Have you reviewed your value propositions recently? Are they still relevant to your targeted customer segments? Or...... have they become out of date as a result of changes in customer needs and competitive developments?
3. Have you added unnecessary complexity and cost to you business over recent years? Do you have brands, products, product variants (sizes, flavors, colors, grades, etc) in your product suite that no longer meet real customer needs & are not truly valued by customers? Are you providing services that are not needed or valued? Would it make sense to bundle or unbundle some of your offerings so you can offer customers a solution that better fits needs and perhaps reduced the complexity of your business at the same time?
4. Do your marketing communications convey your value proposition effectively or might another approach be more effective?
5. Are you being innovative enough in controlling your costs? Are there ways you could make a "step-change" reduction in your costs? Could you move significant activities to other players in your value chain ...... perhaps even reconfiguring your value chain......who might be able to manage them more efficiently and possibly even more effectively?
6. Could you benefit from being less customer driven? Are you listening too much to your customers .... or to the wrong customers..... and responding too much to their articulated needs that may not be well thought through? Are your customers always right? Should you perhaps try to lead them to new offers, that in the long run may deliver more value and/or lower costs to both of you? If your current customers are not interested, are there other segments of existing users, or potential new users, who might be interested in your new offers?
7. Are you in a business that has very high price elasticity? Should you consider a radical drop in price to stimulate primary demand in your market before a competitor sees this opportunity & gains competitive advantage by doing it?
8. Have you tried to systemically understand your low cost competitor's business systems in real depth? What ideas would you come up with if you set the objective of coming up with 5 to 10 learning points from low cost competitors? Could you significantly improve your competitive position by implementing some of the ideas without threatening your core business model......assuming you still believe you have the right one?

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