Introduction
Business rivalry is inevitable in any business environment because profit maximization is the enterprise’s ultimate goal. Therefore, market competition is a revenue expansion strategy through which vendors improve their product and service offering to increase their customer base. Commercial activities involve expenses for stocking merchandise or services and recurrent costs such as employee salaries or rental bills (Baye & Pince, 2016). Revenue gain allows a company to meet these expenses, while loss creates monetary burdens that can be costly for a business. Low financial payments create panic, and the possibility of corporate closure, while capital growth implies commercial success and expansion. Companies put maximum effort into their activities to intensify yields and avoid economic depreciation.
Resilient and strategic decision-making is key to meeting exceeding industry competition. In Keds’ case, the existing competition from business rivals such as Nike, Reebok, Adidas, and Brooks requires tactical marketing, customer service, quality, and price restructuring to meet its trading challengers. The firms should use print media, radio, and television marketing, offer friendly customer services, and adjust their prices compared to those of the competitors. The approach would allow the organization to earn back its customers and make new and long-term clients for a competitive advantage.
Market Structure Pricing
Strategically adjusting the product costs would boost Ked’s sales and ultimate profit. Tactical pricing incorporates a detailed study of the target customer to understand their spending habits and financial capability. Low charges would create an impression that the company’s products are of poor quality. Equally extortionate price of commodities may discourage potential customers who may not afford them (Baye & Pince, 2016). Therefore, Keds’ valuing choices would consider an understanding of the target customer, who in the 1980s would include the middle-class baby boomers with additional disposable income from integration into the growing technological working environment. The costing choices would also be determined by market research to estimate competitors’ rates to appropriately adjust the firm products’ fees in the market for superior earnings. Overall, strategic payment decisions would facilitate Keds’ sales creating a competitive advantage.
Quality and Performance
Quality and performance align with the pricing as valuable products can sell at higher charges yet contribute to customer satisfaction. Establishing a research and development (R&D) department can allow the organization to conduct innovation activities to improve commodity and service quality to meet and even exceed that of competitors. For example, one of Keds’ competitors’ dominant features is an investment in R&D. Adopting this strategy will ascertain that the firm frequently renews its tennis shoe designs allied with changing customer demands. In this way, the corporation would gain and maintain clienteles for competitive and financial benefit.
Marketing would also be a vital step for Keds as it would expand its customer reach. Although social media channels had not been established and increased in the 1980s, broadcast media, including radio and television, were commonly used. The firm would capitalize on these promotion channels and business consistency to reach its target customers. Sufficient investment in advertising would boost the business’s message to existing and potential customers.
Conclusion
Business competition is unavoidable and necessary in the contemporary commercial world. Industry rivalry can be converted into a lucrative opportunity through strategic decision-making on steps required to meet and exceed this competition. In Keds’ context, the firm needs to restructure its pricing strategy to fit the potential buyers. The provision of quality performance is also vital through establishing an R&D department to advance product and service innovation. Lastly, the corporation would also capitalize on the then existing media such as radio and television for marketing and advertisement of the products. These strategic steps would allow Keds to gain and retain more customers for a competitive and financial advantage.
Reference
Baye, M. & Prince, J. T. (2016). Managerial economics & business strategy. McGraw-Hill.