Why Do Businesses Fail?

Mature company, has been around for more than 15 years, simple business structure – manufacturing and merchandising, heavily based on inventory sales, however it is highly prone to competition in this industry. The intensity of rivalry is very high in this industry.

Primary assumptions to the theory include, high barriers to entry and exit, high sunk costs and imperfect knowledge of the market. In addition, this paper will analyze the company’s current standing in the market along with competitive strategies executed to grasp a greater portion of market share.

Businesses are not only faced with competition within the industry they operate in. They also face competition from businesses in other industries.

While our competitors adopted cost leadership and differentiation strategies, we remained the same in our positioning strategies. We remained defenders of our practices and our competitive prospectors overtook us in the market. On a firm level, strong market commonality and resource similarity put us in a place for direct competition that we distinctively overlooked.

Take a look at the examples provided by Apple – the company is the most successful at the products they have already created, with their “cash cow” or most profitable product being the iPhone. Thus, if you worked for Apple, you would look at your consumer base and discover how to upsell them on better, more improved Apple products. This, of course, could leave you vulnerable to potential disruptors if you fail to take into account or ignore niche markets, but, in my opinion, people really just want the best product. They want quality, innovation, and superiority – if your company offers the best improvements incrementally in ways that customers expect – e.g., fuel injection – you can improve your product in your current market and succeed against your competitors. If you create an unexpected innovation to your product, such as with the automobile, the iPhone 6S, and the Macbook Pro with Retina Display, you can radically keep your clients’ interest while increasing your market share with continued

Competition being one of the major issues that often must be addressed in the business world, it is important for a firm to learn on ways to reduce the impact of the competition. Competition is definitely an important factor in helping a business

In today’s business world, competition is a big concern for nearly every corporation. The competition on the market is getting stronger and more difficult to overcome, in many situations corporations terminate their products, production, or their services, just because it is impossible to continue; the cost is too high to focus on gathering development projects in marketing, production, market research, and product innovation, to fight against the competitors.

As technology continue to refine how products and services are delivered to consumers, competition among industry participants becomes more refined. Organizations that are able to keep up with changing technologies become leaders while those that are not fall behind. Mergers and acquisitions are increasing while causing small businesses to sell out or seek partnerships and cooperatives in order to remain competitive and relevant.

A competitive strategy, or business-level strategy, is the way a business used to successfully enter and penetrate into a market (Eastwood et al, 2006), and also, to succeed in this chosen market against its competitors (Johnson et al, 2014). A company needs to develop and apply appropriate strategy to help the company to generate distinctive competences (David, 2007). Compared with the strategies implemented in other levels of operation, competitive strategy is more focused on the competition against other competitors and strategic choices to better attain market share (Harrison and St. John, 2009). According to

In the article, “The Five Competitive Forces that Shape Strategy,” Michael Porter argues that the five forces are an important element for managers and investors in the business industry. Porter stated that it is important to “understand the competitive forces, and their underlying causes” which many companies will use to determine if they will gain profit or not (Porter 80). Companies determine their profitability of the industry through the level of the force that they face. For instance, when the forces are favorable, most companies will be profitable. Porter gives a detail description of the five forces and explains the importance of each force. The five forces are the threats of new entrants, the power of the buyers, the power of the suppliers, the threats of substitute for products or services, and the rivalry among existing competitors. Porter believes that “a company strategist who understands the competition extends well beyond existing rivals will detect wider competitive threats and be better equipped to address them” (Porter 93). In other words, when strategists understand the different forces it will benefit them to make better decisions and to be ready to face the different challenges between competitors. In the article, Porter’s main goal is to present the importance of the five forces to the audience.

To remain competitive a company must consider who their biggest competitors are while considering its own size and position in the industry. The company should develop a strategic advantage over their competitors’

It showed that trust, more business links and better understanding of standard principles were fostered by the incorporation of new ideas into any business. Such examples of new ideas had a direct effect on the progress of a business was when Apple produced the iPhone and iPad.

Every organisation must plan every action it intends to take, in the short-term as well as in the long-term. The company, on the basis of the objectives set by the top management of the organisation should plan for growth, expansion, restructuring of business or otherwise. Every company needs to plan out its strategies according to its future plans in order to avoid surprises and to overcome any challenges they may have to face. Therefore, without planning, the organisation cannot achieve any of its goals.

Companies live and breathe innovation; or, at the terribly least, notice it basic to their success. Such companies are those that others ought to emulate for they recognize that to do business, as Peter Drucker prompt in an exceedingly recent Harvard Business review article, “Every firm—not simply businesses—needs one core competence: innovation.”

The best case that I can think of is Apple's case where, through their unusual success in creating an unprecedented customer loyalty to their brand, Apple is able to sell the most expensive products (far more expensive than their competitors) at hot speed, sometimes even before thy have left the market. This has been the case with both..