What Is Competitive Orientation?
Which aspects of business a firm is focused on depends on its market position and relative exposure to its industry and to the public. A small, local retail firm is likely to be more focused on customer service than on competition, because if it serves its customers well it will do well, whatever its relation to other businesses in the field. Competitively oriented firms, on the other hand, base their business strategy on their competition.
Competitive Orientation
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When a business is competitively oriented, it constant reassesses its strengths and weaknesses relative to its competitors. A performance evaluation may include production efficiency, pricing, delivery times, customer satisfaction, innovation, employee retention and market share. In a competitive economic system, each economic entity is attempting to maximize advantages for itself at the expense of its competitors. For companies that deal entirely with other businesses, for example wholesalers or sellers of raw materials, analysis of competition is more important than marketing or public profile.
Customer Orientation
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Customer-oriented business is engaged in by firms that sell products and services to the general public and need to maintain a positive, high-profile public image. For retail firms, competition is a serious issue, but it can be engaged in by focusing on the customer rather than on the competition itself. When two competing firms both attempt to lure in customers through low prices, high quality and good service, they are competing with each other, but through the medium of the customer. This is a different form of competitive orientation than that engaged in by wholesalers and producers of raw materials.
Market Positioning
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Competitive orientation requires an organization to identify the optimum market position and strive to take a larger portion of it than the competition. Companies all attempt to acquire prime retail space and advertising venues, develop the most tenacious and compelling brands and images and capture as much public loyalty as possible. Much of this jockeying for position is not the result of voluntarily focusing on competition; any corporation would love to be the only player in the field. When multiple players attempt to access the same advantages, competition between them develops spontaneously and can't be avoided.
Short- Vs. Long-Term Thinking
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Large, well-established corporations spend more resources on long-term strategic development than smaller companies, partly because their size requires strategic thinking and partly because they have the resources to do so. Smaller businesses may be preoccupied with daily survival, and may not have the depth and sophistication to be planning their market position ten years in the future. A healthy and well-established business defends itself against competition by maintaining a balanced focus on both short-term viability and long-term development.
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Writer Bio
Jagg Xaxx has been writing since 1983. His primary areas of writing include surrealism, Buddhist iconography and environmental issues. Xaxx worked as a cabinetmaker for 12 years, as well as building and renovating several houses. Xaxx holds a Doctor of Philosophy in art history from the University of Manchester in the U.K.