Innovate to beat off competition

By Viqué-Ocean Kahinju

IN Uganda, six in 10 businesses shut down within the first four years of operation due to lack competitive advantage.

New competitors often cut prices as a way of entrenching themselves in the system and to attract customers.

Consequently, an existing company may be forced to cut prices to keep its clients.

This reduces profits. Your company may fail to meet its operational or overhead costs and collapse, as a result. 

But this occurs if a company has no competitive advantage, explains Julius Chime, a business expert at Enlightening Entrepreneurs Enterprise.

According to Chime, upto 87% of businesses suffer from a lack of real competitive advantage. They cannot shield themselves from the challenges of fierce competition.

Additionally, 55.4% of businesses do not have good marketing strategies, 44.4% lack modern technology and skilled workers, 28.7% do not have access to entrepreneurship news, 30.4% lack access to raw materials and 35.5% struggle with proper book-keeping.

To gain competitive advantage, one should up their game. Create unchallenged market space and make competition irrelevant by fostering innovation and forging stronger links with business partners at the national, regional and international levels.

Thanks to regional integration, substantial markets are being created. 

The East African Community has about 130 million people. This implies 130 consumers, Chime says.

“Unfortunately, most entrepreneurs take things for granted. They think being pioneers for a certain business will shield them from competition. That’s risky. Never underestimate your competitors’ potency. Often times, new entrants employ similar or superior strategies that cause panic or sweep you off the business scene,” Chime warns.

Stand out from the crowd by getting your own identity, he adds.

Also, establish a business that operates with unique technology. Having business processes that are extremely difficult for others to replicate can help you to stay afloat even when faced with competition.

On the contrary, most entrepreneurs start up a business using items bought off-theshelf.

A dry cleaning machine, or baking oven for instance, cannot promise their business a real competitive advantage, Chime asserts.

 “Anyone else can buy or license the same equipment and start a similar business to compete with yours”.

Real competitive advantages are ingrained in proprietary skills. A serious entrepreneur must endeavour to establish their own craft of doing business. 

But they should also build confidence in their supply chains, he advises.

“A supply chain represents the company’s performance. It shows the competitive advantages you have over your competitors as it depicts consumer response or loyalty towards your brands as well,” says Chime.

For that reason, a business owner must listen to what their supply chain is saying lest they are out-competed, he warns.

According to Alex Barigye an IT expert and business analyst at Flourishing Businesses, every day, a new company aims at penetrating the market, while the existing ones strive to re-establish themselves to conquer the market and expand their market share.

However, new entrants can potentially be strong competitors, so companies have to be innovative so as to remain in business.