Brand Relevance: Making Competitors Irrelevant - always yours

EVALUATION 221
Overcrowding is a reality in virtually all hyped markets, from
railroads to airplanes, radio stations and equipment, televisions
sets, personal computers, and e - commerce. At one point in the
Internet bubble there were at least one thousand travel - related
sites and thirty health and beauty sites. The sales volume is
usually insuffi cient to support all competitors. A key question is,
Will the number and competence of competitors that may be
attracted create overcapacity and price competition that will
turn the marketplace hostile?
The following conditions make overcrowding more likely:
• The market and its growth rate have high visibility, especially
to fi rms in adjacent markets.
• Very high forecasts and actual sales growth in the early
stages are seen as evidence confi rming high market growth.
• The initial barriers to success such as distribution availability
or brand loyalty are not visible or are discounted, and
there is little to dampen enthusiasm, which may be spread
by journalists, the venture capital industry, and many others.
• Some potential entrants have low visibility, and their intentions
are unknown or uncertain.
Competitor Strategies
An analysis of competitors should identify the candidates most
likely to enter — those with the needed assets and competencies
in place. But there will also be those that fi nd strategies
to bypass an apparent asset. For example, a fi rm may choose to
market through the Internet, thereby neutralizing a need to
access a fi xed distribution channel.
A concern is whether a fast - follower firm will be able build
on the learnings of the early market leader and neutralize the
first - mover advantage. Much of the innovation and the results
of a test - and - learn process may be visible. Thus the competitor
can save a lot of investment in time and resources, they can