An important part of an external audit is identifying rival and determining their strengths, weaknesses, capabilities, opportunities, threats, objective, and strategies.
For example, Tupperware Brands Corp. (TBC) product and sells household products and beauty items. TBC competes intensely with Avon products and Newell Rubbermaid. Tupperware parties became synonymous with American suburban life in the 1950s, when independent salespeople organized gatherings to sell their plastic containers. TBC today deploys a sales organized gatherings to sell their plastic countries. TBC today deploys a sales force of about 2.6 million people in about 100 countries and obtains more then 80 percent of their annual 2.3 billion revenue from outside the United States. Table 3-6 compares Tupperware with its two largest competitors. Note that TBC outperforms Avon and Runbbermaid on most criteria.
collecting and evaluating information on competitors is essential for successful strategy formulation. Identifying major competitors is not always easy because many firms have divisions that compete in different industries. Many multidivisional firms do not provide sales and profit information on a divisional basic for competitive reasons. Also, privatelyheld firms do not publish any financial or marketing information. Addressing questions about competitors such as those presented in Table 3-7 is important in performing an external audit.
Competition in virtually can be described as intense - and sometimes as cutthroat. For example, Walgreens and CVS pharmacies are located generally across the street from each other and battle each other every day on price and
customer service. Most automobile dealerships also are located close to each other. Dollar General, based in Goodlettsville, Tennesses, and family Dollar, based in Matthews, North Carolina, compete intensely on price to attract customers away from each other and away from Wal-Mart. Best Buy dropped prices wherever possible to finally put Circuit City totally out of business.
Seven characteristics describe the most competitive companies:
1.Market share matters; the 90th share point isn't as important as the 91st, and nothing is more dangerous than falling to 89.
2.Understand and remember precisely what business you are in.
3.Whether it's broke or not,fix it - make it better; not just products, but the whole company, if necessary.