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Formulating Price Competition Strategy - Part 1

Posted On - 10/10/2013 17:24:10

When formulating strategy, think most about the competitors that matter‘Everyone's competition' someone recently said to me. The internet, the chains, the man-in-the-van, the business services specialist, even the local corner shop - they are all a threat. Really? People shop where their money buys the value they want. So lumping everything together doesn't just create a huge problem and stall strategy formulation to a stand-still, it's just not right. Strategy is about how you'll respond to the opportunities and threats your competitors present you, and how you'll leverage your strengths to create yourself competitive advantage. And if you want to formulate one that's cohesive, robust and reliable you have to be clear about what really matters and what doesn't.

Setting the scene

This blog is part of series on how to write and formulate strategy. Its objective is to do everything possible to help you write your own, without actually doing it for you. Using an imaginary business – URPCSFIXED Limited - with 8 fictitious competitors, it illustrates the process end-to-end. Each blog represents a major stage of strategy development with detailed guidance, tools, templates and the appropriate part of the Strategy Document fully written up, given. For more detail on the different blogs in this series and how they all fit together, see ‘A Strategy for Price Competition'.

The process of Strategy Formulation

I usually write these blog like a story. They follow an unfolding narrative that makes its points bit by bit. But I'm not going to do that with this blog. Because I want to help you better understand the steps in devising a Strategy for Price Competition - you could need to do them yourself. So this blog will be written like a process. And with 7 steps in strategy formulation there's much to set out. So this blog will be split into two parts. Here's what's in each:

Formulating Strategy | Part 1

1. Define your real competition
2. Prioritise business improvements
3. Leverage existing business advantages

Formulating Strategy | Part 2

4. Identify pricing changes
5. Define your attack on the Big Chains
6. Making price competition part of your culture
7. Documenting your Strategy for Price Competition

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