Redefining Competition: Lessons from Amazon’s Value-Driven Approach

Competition has always been tough for brands, but today it has become more challenging than ever. On the one hand, the increase in product and service variety, and on the other hand, the explosion in marketing communication channels with social media and mobile communication technologies, require both consumers and brands to cope with ever-increasing options. The problem is that in this chaotic environment, many companies, almost reflexively, focus on their competitors and their products and services when competing, trying to catch up with them or race against them. While this approach may yield results in the short term, it turns into an unproductive vicious cycle in the long run. So how can brands escape this competition chaos and ultimately this vicious cycle without getting harmed? Let’s take a look together. Value-Based Competition vs. Competitor-Focused Competition In competitor-focused competition, companies track their rivals and position themselves accordingly. They focus on developing products and adding new features by looking at competitors. However, this approach often keeps brands in a reactive position, leading to many lasting problems such as inconsistent product expansions that disrupt brand integrity or pricing and sales strategies that damage brand perception. In the end, it causes them to lose their unique value propositions. In contrast, value-based competition strategy centers on the customer, focusing on their real needs and problems. Thus, instead of following competitors, the brand charts its unique path. It doesn’t position itself reactively by looking at competitors but determines where to position itself in its ideal customer’s life by looking at its fundamental purpose for existence. In this strategy, where customer insights are at the core, the brand primarily competes with itself in line with its purpose. Amazon’s aim to be “the world’s most customer-centric company” is a perfect example of this strategy. Amazon doesn’t develop strategies by looking at its competitors. Instead, it looks at its customers and improves by asking, “How can I create more value to maximize their satisfaction?“ Steps to Transition to Value-Based Competition Value-based competition strategy is implemented by many large brands like Amazon today. So where should one start to implement this strategy? Value-based competition strategy brings brands to a more strategic and balanced position for sustainable competition and growth. Of course, this approach doesn’t mean completely ignoring competitors. Understanding the competitive environment and monitoring competitors’ moves is always important. However, the real difference lies in how you utilize this information. In value-based competition, which is implemented by the world’s most valuable brands including Amazon, Apple, Google, and Nike, brands focus on their own purpose of existence and the unique value they provide to their ideal customers, rather than imitating or reacting to competitors. This perspective allows brands to maintain their unique identities, build deeper connections with their customers, and achieve long-term, sustainable growth.

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