"The intensification of competition is a powerful stimulus for companies to excel"

In every business sector, competition is becoming more intense, sometimes exacerbated by new entrants from the tech sector.  To cope with this, operational models are being sharpened, yesterday’s activities are being sold, and many acquisitions are being made to strengthen the business lines with the most potential for growth. Sophie Cassam Chenaï, Digital Director at Le Parisien, shares her vision.

Competition has intensified in recent years because we are in a dual dynamic of globalization and de-globalization.

On the one hand, the economy is globalized and liberalized, which means that innovation is taking place on a global scale, that technological talent can be found in all countries, particularly in emerging countries, and that competitive markets are worldwide. Thus, tech giants are acting on a global scale, and the desire to pay less for the consumer takes precedence.

At the same time, we are witnessing a re-localization of value creation, with countries and populations focusing on themselves  to  protect and  re-localize innovation  at home. promote local roots, and  protect the environment through reduction of the carbon footprint. Local innovations are therefore encouraged and supported, and the development of SMEs or innovative start-ups in the regions is also encouraged to promote proximity. French preference and local preference count in the choice of products, goods and services.

Most sectors are affected, maybe except for government services. But this intensification of competition is also a powerful stimulus for companies to excel, to create the best offerings and to innovate. The key for companies in this highly competitive context is to retain their human resources and their key skills, which are an essential link on which to capitalize.

Many new entrants in digital or tech arrive by creating a disruption in their market model by simplifying intermediation or by bringing a new service. Most of them are new marketplaces that reshuffle the competitive deck and change markets. This is the case of services like Uber or Airbnb, for example, which have completely changed the rules of their markets in the way of accessing a cab or a vacation rental.

There are also all the digital services that play on buying second-hand or reconditioning recycled material to consume more sustainably and more locally, such as Le Bon Coin, which has facilitated local second-hand trade, or more recently Back Market, with its proposal of reconditioned products at affordable prices.

New music platforms like Deezer or Spotify, or video platforms like Netflix or Amazon Prime are also new entrants that have created their market.

And then all the tech tools and digital solutions that allow remote work in a pandemic context are also new entrants, as well as facilitating platforms in this context like Doctolib, which literally exploded by allowing online medical consultations during the confinement.

Finally, in all sectors, companies are often making a digital transformation by offering their services online: retailers with online sales or newspapers and magazines with digital versions and articles reserved for digital subscribers. This digital transformation is key for the survival of the company and the quality of the transition to digital can replay its position on its market. Thus, the first in its market may no longer be the leader after its digital transition. The success of its digital transformation is therefore key in a context of intensifying competition.

Competition has positive effects because it generates a permanent stimulation, even a revitalization of the markets. Companies increase their budgets for innovation or R&D to stay ahead of the game and improve the quality and originality of their proposals to better meet users’ expectations.

Competition is also often at the service of purchasing power. Indeed, intense competition often means lower prices, which is good for the end user’s wallet.

Finally, one of the ways in which companies resist the intensification of competition is by buying out complementary innovative solutions or direct competitors  to consolidate their position in a market and avoid being overtaken. This concentration allows companies to develop faster, to diversify further, to enter international markets, to control the entire value chain without being dependent on third-party service providers, or to better resist the competition thanks to a consolidated force.

Recruitment and retention of human resources is also key in this context. You  must be able to attract and retain talent in the  context of intense competition. This is a positive point for employees, who find themselves better considered with a better balance between personal and professional life, attractive salaries, and facilities for teleworking. In the end, everyone wins: competent employees feel better in their work and are therefore more efficient. They are the real lifeblood of the company, enabling it to resist in a context of intensifying competition.