Their biggest barrier to success dealt with the encroachment of e-commerce and companies who were competing in our market without having brick and mortar expenses; American taxes and employee issues; and American taxation and regulatory issues. Management decided that competition was not dead, and it was up to the company to change and adapt as opposed to ensuring the clients did so.
Traditionally, competition is based on price, offers, and markets -- product or service A versus B. For more sales, more customers. The new market template though, is part of a fluid cooperative environment -- for instance, a great restaurant in a neighborhood that is failing will likely go under. So, the coevolution of companies that take into context environmental issues as part of their ecosystem (supplies, producers, competitors, stakeholders); form a different type of competitive nature. Porter notes that "Substitutes limit the potential returns of an industry by placing a cap on the prices firms in the industry can profitably charge" (Ibid., 112). But, in addition to pricing, we found that the competitor's products were shoddily made; external paint chipping, inferior manufacturing techniques and materials, and a long list of service and quality issues.
In the global market place, collaboration is as important as cooperation because of the supply/demand curve (sources), consumer need, and ability to drive the...
In many ways, certain businesses are not as much in competition with each other for the consumer's dollar, as they are with similar industries offering alternatives. Too, cooperation can provide a needed synergism to enhance and refresh an organization, keep it more on the cutting edge, and refuse to allow status quo to set in. Knowing this, the solution was painfully easy -- painful because it required the strategic alignment with other domestic organizations that had been fierce competitors in the past.
The decision was made to cooperate in the marketplace by doing the following:
a. Reducing overhead by bargaining with suppliers for larger deals that were split between the organizations. This allowed greater flexibility on pricing.
b. Pooling resources for a cogent advertising message that offered the benefits of shopping locally and purchasing an American product (manufacturing, ease of warranty issues, quality, service, and training).
c. Pooling resources to educate clients on the product and offering extra that a foreign, e-commerce-based business, could not.
In a sense, then, the organization was able to strategically pool human and capital resources together to change the bargaining power quotient; increasing the bargaining with clients and suppliers in order to provide a more competitive environment for the brick and mortar companies.
