Its low-cost competitors Want to eat their food

Many industry leaders are facing a sea change in the market, in particular the attack of many low-cost competitors. They are small fish and sharks grow to become if not nipped in the bud. Examples abound in the proliferation of Chinese products on the world market.

The way to handle these manufacturers is to try to cut the roots. It's like war. You should not allow their skills to make a head beach. For once they can do, will be much harder to dislodge them. Will you call out in the waters where they are most vulnerable. When customers are treated low cost products and how they will be very difficult and expensive to bring them back to change their products. If you can not beat the low-cost competitors in the game price everything else is equal, then better to identify other niche premium.

Johnson & Johnson health care multi national company also faces stiff competition and a long wait for the blockbuster drug is coming. As part of their strategies to restrain competition, it has gobbled up 34 companies in the past 5 years and continue to acquire. Johnson and Johnson also make existing drugs for new uses – epilepsy drug Topamax migraine is now. Workers are made to cross the lines of division to develop products and delivery systems, including treatments for stroke, diabetes and schizophrenia.

Teamwork between pharmaceutical and device divisions led to billions of dollars of coronary stenting. Reducing costs in the most 200 units, merging back-office operations and centralized purchasing helped save $ 1 billion in funding from two years to be used in the development of such needed new pharmaceuticals.

Moreover, Hoover, which makes vacuum cleaners since 1907, has reduced its unionized staff of 1800 bit more than 1,500 in 1994. The Chinese competitors have been selling cheap $ 79 vacuum. Hoover with price tags of $ 200 and above can not compete and was surprised. These Chinese low-end models and has 40% of the market. Hoover tried layoffs, new vacuum cleaner features, etc. but without success. Moreover, the leader Whirlpool's market is 38% in sales revenue and only increased its earnings forecast for 2004. Whirlpool no longer sells vacuum cleaners and diversified into other household appliances.

As mentioned earlier, the Port Authority of Singapore (PSA) also lost its competitiveness when Tanjong Pelepas in Malaysia snatched the PSA number one and two customers with cheaper prices. The Singapore government has learned that lesson and is quickly responding to threats from low cost airlines low cost and regional air facilities. Airlines can also overlook the Singapore Changi Airport and fly directly from Australia to Europe or the Middle East to U.S. to avoid a stopover in Singapore. Singapore Airlines is introducing low-cost airline Tiger to compete in this sector and to promote its image through the first airline to offer new nonstop flights and direct flights to the U.S.. Singapore Changi Airport is building a terminal for budget airlines. The Singapore government came down hard on the pilots of Singapore Airlines to ensure that the national airline is not driven by labor disputes. The terminals airport are in the process of renewal and improvement. The jury is still out on whether all of these proactive measures can effectively maintain competitiveness of air transport and the aviation industry in Singapore. However, it is better to wait for low-cost competitors to gobble his lunch right under his nostrils.

Another case is the competition pen and Fountain Pen. Pens were much cheaper, easier and less complicated to use. Feathers were beaten upside down and missed most of the market share of the pens. Then someone thought of making the pen a luxury item. The pen was sold for U.S. $ 400 and positioned as an element of prestige and luxury, like jewelry wear. Manufacturers as the source of Parker pens, Sheaffer and Mont Blanc has then comfortably locked in the high-end segment of the pen can not penetrate.

Today, both the fountain and ballpoint pens coexist each has its own market niches. You have to be careful and be prepared to prevent the movement of making low-cost competitors. This is why Howard H Stevenson in his book said, "No Lunch or Be Lunch".

Its low-cost competitors not only sting in its low-price segment, they want to eat their food

About the Author

Dr Mike Teng (DBA, MBA, BEng) is the author of best-selling book, “Corporate Turnaround: Nursing a Sick Company back to Health.” He is known as the “Turnaround CEO in Asia” by the media.

http://www.corporateturnaroundexpert.com;

http://www.corporateturnaroundcentre.com

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