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Beating competition through innovation

Monday, July 25, 2011

By Tias Chakraborty

India’s growing economy, irrespective of its high inflation and dwindling industrial growth rate, has brought multiple opportunities for SMEs. Besides the established players reinventing themselves, new entrants have also ramped up competition. Therefore, the key to survival in the present market scenario is dealing with one’s competitors and making innovation a part of the company’s business model.

“The best way to deal with competition is to ensure constant innovation and come up with new products as regularly as possible,” says Pawan Sharma, owner of Shri Bharat Cloth Centre, an established garment distributor in Kolkata.

The developed nations have also woken up to the competitive spirit of India. Recently, the US undersecretary of Commerce for International Trade, Francisco Sanchez, said at a recent media address that the global market was rapidly changing and the competition from economies such as India is becoming more intense.

Handling competition

For any SME it is important to understand the competition they have to deal with before entering, innovating or expanding their business.

According to Soumyajit De, business analyst at Fi-Tek Pvt Ltd, an established business research with global presence, “Some of the important things that SMEs can follow to stay ahead of competition are:

Thorough research on the business model of competitors
Encouraging employees to share ideas and discuss strategies to deal with competition
Instead of creating new products as a reaction to a competitor’s move, it is important to be pro-active and come up with ideas before others
Vertical and horizontal communication within the company is important and fresh ideas must be considered
An SME entrepreneur has to ensure that the company’s employee policy and security policy do not allow leakage of strategic or sensitive information to competitors
Comparative data and customer feedback of competitors must be gathered whenever possible and the information should be available when needed

A constantly evolving model where there is ample opportunity to innovate, improvise and invent is therefore the key to survival for SMEs in the highly competitive Indian market.