The contribution of MSMEs has always been central to the growth of an economy. Over the last few years, various steps have been taken by the Government and regulators to strengthen the MSME ecosystem. MSMEs sector has been at the centre of attention for a long time now.
While MSMEs in India continue to remain one of the highest employment-generating sectors, their performance in the international markets has much scope for improvement. MSMEs account for 90% of businesses, 60 to 70% of employment and 50% of GDP Worldwide. It is the backbone of societies in every country and they contribute to the local and national economies to sustain livelihoods for groups in vulnerable situations.
Understand your competitors
With the rise in MSMEs, there has been a constant rise in competition as well. To understand the competition in the market, a deeper understanding of what the customers want and the response they have for the product can give a proper indication. Using this for the benefit of the company can give a crucial advantage against the competitors in this tough market.
It is necessary to have a clear knowledge of the market the MSME works in, the needs of the consumers and what the competitor’s strengths and weaknesses are. Once you understand your competitor’s strengths and weaknesses and how the consumers would react to the changes brought forth by them. Once you understand this process, it helps your MSME to stay one step ahead. Also, the competitive practices adopted by each MSME should comply with the relevant competition law.
How the competitors shall respond to your actions is a critical component of strategic decision-making. This is something not every MSME takes into account when creating a strategic marketing plan for your business, this was a survey conducted by Mckinsey & Company. They stated that as important it is to know the market, it is even more necessary to predict the rival’s behavior – this involves a few sets of questions that an MSME can ask itself
- Will the rival company react at all?
- What are the options that the competitors may take or consider?
- What actions will the competitor choose to act upon?
There can be various outcomes to the competitive practices taken up by them and they would choose the option that will be the most effective in combating the new strategy in place by your MSME. The key is to get inside your competitor’s mind and look at the situation from their angle.
Conduct market research – Market research involves the collection and analysis of data about the market, the consumers and competitors. It is essential for any new market that you move into, it should provide the best outcome. Research is done in order to avoid any issues regarding the product or to put it simply so that your business is not wasting its time on unnecessary objectives. The process of researching your competitors is easier than it may appear. For example, you can read their online materials, collect any flyers and price lists they produce for customers or even purchase their products and services to compare.
Strategies to compete
A streamlined procedure is made feasible by two facts. First, you can use those tactics to predict their response given your adversary employs basic analytical techniques, which our survey reveals is the case for the majority of firms. In our research, we discovered that most big businesses tend to respond to competition moves in a predictable way.
Second, is to have a unique selling proposition for your MSME that would allow you to stand out among your competitors. Through market research you can figure out the gaps and opportunities in your product, this will allow you to bridge that gap and create your own USP.
You will need to find the most effective way to communicate your USP to your customers once you have a USP and you have verified that your market research supports it. A new or unique marketing campaign, an engaging and memorable advertisement, or a slogan that customers will remember are often ways that businesses communicate with their customers. Make your USP memorable so that potential customers will think of you before your competitors.
Competition is something that exists in every aspect of life, be it personal, academic or business. It is the one that employs the best and strongest competition strategies that are able to survive in
this market. Market research can provide an insight into the kinds of strategies that can be undertaken –
- Market research will show the current prices that are set for the competitors along with the price the customers are willing to pay. The prices should be set in such a way that remains profitable for your MSME and also prevents the consumer from searching elsewhere.
- Quality of the product/service
- When the customers have a positive buying experience, it is likely that they would come back for more. Customer retention is one of the most necessary tools against competitors.
- Sales and Marketing
- A brilliant sales and marketing strategy allows you to cover up the rest of the way in order to respond to your competitors. It is an excellent way through which you can communicate your products/services benefits to the customers. A marketing strategy allows you to reach more audiences and create an image of what your MSME has to offer.
Few research-based studies have found that only 23% of executives learned about their competitors’ new offerings early enough to respond. MSMEs are mostly run on sole proprietorship and their entire focus is on making the business afloat. They are now focusing on the digital arena as well and taking advantage of resources that are at their disposal like never before. Covid also came in as a blessing in disguise as small and micro industries are becoming open to adopting digital technology to up their game.