Saturday, March 9, 2013

Why Competitors ARE Stakeholders

Over the years, the blog posts that have drawn the most readers have been about the idea of competitors as stakeholders. Stakeholders are groups that can have an effect on or that are affected by an organization's performance in some way. Traditional lists of stakeholders include customers, regulators, suppliers, distributors, the media, and so on.

I encourage marketers to include competitors as an external stakeholder group to be considered in any situation analysis. To recap my previous posts on this topic:
  • Smart competitors try to anticipate what rivals will do and how customers will react, so never underestimate your competitors - and be aware that a strong industry is in the interests of all competitors.
  • Competitors often target your customers or your market share, meaning what they do is likely to affect what you do, either directly or indirectly.
  • When a large competitor goes bankrupt, its absence immediately changes the marketing situation for the remaining industry players. In fact, intense competition (sometimes from unexpected sources) is often the reason for one company's inability to compete and its bankruptcy.
Pirelli, the tire manufacturer, explicitly acknowledges that competitors are stakeholders in its 2012 explanation of stakeholders and strategy: "More than ever, Pirelli is absolutely convinced that its business is inextricably linked to its capacity to create value while satisfying the expectations of all its stakeholders."

The company lists these categories of stakeholders: Shareholders, customers, employees, communities, public administrations (meaning business infrastructure and government obligations), institutions and NGOs, suppliers, competitors, and the environment. As the graphic below shows, Pirelli believes that "fair competition generates improved customer services as well as market qualification."

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