Controlling the fall of product

The new product launched by your rival is eating up your market share ! And to make it worse he is doing it by presenting a whole new technology to the market. You need to develop a product better than him! But that takes time and also has costs. How do you stay competitive in the market for longer period?
Normally a product life cycle curve looks familiar to the graph below. Notice your rival product (in blue) and your subsequent decline in black. Point is it due to the new product that has been launched? No !

Surprised? Well let me explain. Going by the stage at which your product was- you were not catering to the early adopters- the category who are willing to try out anything new. It is the early adopters who are buying the product of your rival at this point and these people never buy a product which is at peak of its product life cycle( Where you are!). So essentially the rival product is not competing with you in a big way at this point.

The focus at this point of time should be to reduce the rate of decline of your product sales( compare the red line vs corresponding black line).That is important not only in terms of revenue, but also provides you ample time to match or preferably better your rival’s product. Let’s see some factors how to do it:
1. Cost competitive- Since you are no longer the most technologically advanced kid on the block, try to fight the price war more effectively.
2. Lead times and delivery- Be more efficient in managing your supply chain- shorter lead times will definitely make many clients stick to you, especially those who have limited functional needs.
3. Knockoffs- Fight the knockoffs hard and fast ( the cheap fakes which flood the market), it is the single biggest factor that is causing the sharp decline. If needed even collaborate with your rival to tackle this menace !
4. Invest in R&D : Develop your product with new technology breakthroughs and offer upgrades to your customers. Always remember aim not for the most advanced, but for the one with the highest demand.
Following these simple steps will ensure more often than not that you are able to compete successfully with your rival’s product in the long run.

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