One topic that we discussed this week in class was competition. Competition is a factor in a company's external environment. Competition effects companies because different businesses take away customers from their business leaving them with lower revenues. As trade barriers get looser global markets are expanding businesses and increasing competition, so businesses not only have to focus on domestic competition, but they now have to worry about global competition as well.
Four different kinds of competition that we discussed in class were brand competitors, product competitors, generic competitors, and total budget competitors. Today I'd like to elaborate a little bit more on these specific types of competition.
A brand competitor is a competitor with virtually the same product as you.
A product competitor is a competitor with a similar product to you.
A generic competitor is a competitor with a product that satisfies the same needs as your product.
And finally, a total budget competitor is a competitor that offers a product in the same price range as yours that could satisfy similar needs to yours.
To simplify this lets make an example. Suppose you were Ford and you were selling the Ford F-150 (a pickup truck). A brand competitor for you would be any other pickup truck such as a Toyota Tacoma or a Nissan Frontier. A product competitor would be any other car company selling any other kind of large car such as GMC. A generic competitor could be some other form of transportation that could get you from point A to point B, such as a motorcycle. And finally a total budget competitor would be some sort of mode of transportation that is in the same price range as the Ford F-150.
What are some other product, brand, generic, and total budget competitors for the Ford F-150? Can you think of another product and its brand, product, generic, and total budget competitors?
Are there any products you can think of that global competition doesn't effect?