Just As Heart Ailment Is A Major Killer, Competition Is The Silent Killer

The management mantra of the 1980s was product quality, and activities involving
Quality Control (QC) circles, Total Quality Management (TQM) and ISO 9000 were the
order of the day. Back then, consumers were willing to spend enormous sums for quality
products. However, product quality has significantly improved and today having a good
quality product is a mandatory requirement for the companys effective participation and
survival in the marketplace.

Subsequently, the management slogan in the 1990s embraced technology as the cure-all.
Companies then tried to distinguish themselves from their competitors through the use of
technology, by offering better and more sophisticated features, use of the Internet and
communication systems. Huge sums were channelled into technology to build a better
mousetrap with more superior state-of-the-art features. Today, the world does not beat
down the door of the better mousetrap developer. The collapse of the high tech stocks on
Nasdaq in the early part of 2001 illustrates the vulnerability of technology.

The thrust in the new millennium is competition. Competition intensifies with the
emergence of a better range of products that are often of superior quality coupled with
attractive and affordable pricing. In such a scenario, many products become marginalized,
and like commodities, pricing becomes a key determinant in a shrinking market.

In todays competitive environment, your margins for errors are also thinner. In the past,
three strikes or major mistakes and you are out, but today, one strike or major mistake
and you are history. Customers have many choices and they will switch their suppliers at
the turn of the dime if you make a major error in quality, delivery, etc.

Oftentimes, the elusive competition quietly sneaks in by the back door. You may have
been losing trickles of disgruntled customers and one day, you come to the sudden
realisation that even your major customers are gone.

PSA Corporation learnt too late to retain its number one customer, Maersk from
switching to Port of Tanjong Pelepas in Johore. After PSA Corporation rejected the
requests for better terms of AP Moller Group, parent of Maersk Sealand, the worlds
largest operator of container ships, the Copenhagen based company moved the operations
to Tanjong Pelepas and also took a stake in the port. This was a double whammy for
PSA Corporation as it not only lost its biggest customer, it has to compete against its
former ally. With the help of Maersk, Tanjong Pelepas is able to capture Evergreen, PSA
Corporations second largest customer. . PSA had tried to compete on efficiency and fast
turnaround of clients ships. But this could only justify for some price premium for up to
a point. Consequently, PSA Corporation has to downsize in order to stay competitive, a
tad too late as it has lost its top two customers within a short period.

Competition may lead to opening up new markets. For instance, with the advent of the
low budget airlines, more poor Indonesians are also able to travel overseas. This is the
market segment, which most major airlines such as Singapore Airlines will ever wish to
target. But one should never under estimate or take the competition for granted.

Competition is a silent and sudden killer like heart attack, it can creep up on you without
warning. However, just as an individual can prevent this disease by adopting a healthy
lifestyle, a company can stave off competition by remaining alert and adopting
appropriate strategies to combat it. When you are faced with increasing competition, you
may still survive, prosper and succeed, but it is no longer business as usual.

http://www.corporateturnaroundexpert.com

Dr Mike Teng (DBA, MBA, BEng, FIMechE, FIEE, CEng, PEng, FCMI, FCIM, SMCS) is the author of the best-selling business book Corporate Turnaround: Nursing a sick company back to health, in 2002. In 2006, he authored another book entitled, Corporate Wellness: 101 Principles in Turnaround and Transformation. Dr Teng is widely recognized as a turnaround CEO in Asia by the news media. He has 27 years of experience in corporate responsibilities in the Asia Pacific region. Of these, he held Chief Executive Officers positions for 17 years in multi-national, local and publicly listed companies. He led in the successful turnaround of several troubled companies. He is currently the Managing Director of a business advisory firm, Corporate Turnaround Centre Pte Ltd, which assists companies on a fast track to financial performance. Dr Teng was the President of the Marketing Institute of Singapore (2000 2004), the national body representing some 5000 individual and corporate marketing professionals in Singapore

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