The global market is changing rapidly and competition is fiercer than ever. Asian companies are beginning to outshine their American and European rivals in a variety of industries, according to Business Week. Toyota will soon overtake General Motors as the largest automaker and the market capitalization of several Indian service companies is now approaching the size of General Motors. In a recent issue, Business Week explored the ways that successful companies are adapting and staying ahead of the competition, which is information that any direct marketer could benefit from.

Differentiation

Industries are under attack by competition that did not exist a few years ago. For example, eBay is taking on the major telcos over its free Internet phone service Skype. Google’s email and word processing services are taking on Microsoft and Google’s advertising services are challenging Madison Avenue. Instead of looking at competitors, companies that stand out in the global marketplace are finding ways to differentiate themselves by creating new markets. In today’s business environment, it is sometimes more important to be unique rather than the biggest player in your industry. Whole Foods is an example of a smaller grocery retailer that found a profitable niche and brand loyalty among a group of customers interested in a healthier, greener lifestyle. (Workweek).

Developing new markets

Cirque du Soleil, Apple and Starbucks are examples of companies that created new markets and reaped the rewards of creating innovative products, according to Business Week. How profitable can it be to create a new market vs. developing a product that is simply a brand extension? Research in a Blue Ocean Strategy book by W. Chan Kim and Renee Mauborgne showed that “86% of product launches that were line extensions accounted for 39% of the profits from all new business launches of 108 companies. tracked, but the remaining 14% of product launches representing new markets accounted for 61% of profits! “(Business Week) The lesson here is that you don’t have to be a mega brand to be profitable.

Customer service, customization and efficiency

Understand what your customers want and use that information to your advantage. Google instantly polls millions of consumers and businesses who have websites that link to each other. This allows them to produce better search results than their competitors, according to Business Week.

The trend towards mass production of products is also declining. Successful companies like Dell and Land’s End are providing customers with custom computers and clothing, rather than trying to mass produce products that appeal to the widest audience. Nor is it enough to differentiate your business today simply by being the low-cost producer. But it’s important to be efficient to stay competitive, according to Business Week.

Competition is constantly evolving in today’s market and companies and their leaders who are in touch with the ways in which the winners are differentiating themselves will be one step ahead of the competition.