The Ever-Present New Competitiveness

La nueva competitividad de siempre

In the early years of this century, we live in a highly stratified and competitive society, characterized, among other things, by phenomena such as globalization, the development of the information society, and the new competition from emerging countries.

All of this, seasoned by the surge of the so-called bubble, its burst with the profound crisis of 2008, with resulting sequels and transformations still being felt, and the onset of the ongoing COVID-19 pandemic. Is there more to come?

All of this is testing the design of strategies to respond to such profound and radical changes. Currently, there is a consolidated doctrinal body of principles governing the strategic development of companies. It is also true that at each evolutionary stage of the markets, attempts are made to respond with new theories that, when freshly formulated, lose their utility because their foundations are based on circumstantial or poorly verifiable facts. This generates confusion and uncertainty, and it seems that what was valid yesterday is no longer so today.

We should reflect on what remains and what truly changes. Strategic principles do not change as much as the constant need to adapt to changes in the necessary conditions to remain competitive and achieve success. Success is manifested in selling with value, holding a market, and securing the future – that is, making a profit, satisfying customers, and ensuring the survival of the company.

The phenomenon of globalization is not giving rise to the emergence of homogeneous global markets but to a global culture that influences the equalization of consumer lifestyles. At the same time, each local market has its own competitive structure, which can be highly unequal. In contrast to the sophisticated consumption of advanced societies, there is the emerging consumption of developing countries. By 2030, according to the World Bank, the world’s population will reach 9 billion people, with 90% living in these new markets.

A significant factor shaping global culture is the development of the information society, which allows, through its instantaneous communication networks, the creation of a new social bond among individuals from very different environments, developments, and cultures. In opposition to a global culture, strong cultural movements are emerging that assert a local identity for a people, a country, an ethnicity, or a religion. Once again, we see the opposition between the global and the local. In marketing terms, one must understand that needs and ways of satisfying them are the same in different markets, but what changes in each market is how those same needs are satisfied with different proposals.

One feature of the current strategic approach is the deconstruction of the traditional value chain, where competitive advantage based on Cost Leadership or Differentiation is no longer a mutually exclusive fact. Production outsourcing, the replacement of the experience curve by network economies, global logistical development, and the technological capacity of emerging countries enable access to both lower production costs and the manufacturing of high-value products.

As a result, the new value chain anchors itself in the links that give rise to the competitive essence of today’s companies. Internally, this includes innovation, digitization, and organizational models. Externally, it involves high segmentation, brand image, and consumer engagement. In this new formulation, there are deeper changes in the corporate structure and the foundation of its values than in the marketing that guides its competitive development: the need to create distinctive products, regardless of where they are manufactured or who manufactures them, a strong positioning, and a powerful brand image remain fundamental.

After much thought, a bold perfumer from Rue Rivoli decided to move to Place Vendôme, just a few doors down from the prestigious best perfumer in France. He chose a location with large shop windows and placed a careful and visible sign that read, ‘The Best Perfumer in Paris.’ The rest of the competitors increasingly saw their reputation sink, as they struggled against the best in Paris, who even surpassed the best in France.

Meanwhile, Brochez Saavedra, son of a French mother and Spanish father, born in Fauburg du Temple on the outskirts of Paris in 1772, who had learned the art of perfume alchemy in his maternal uncle’s laboratory from a young age, eager to be independent, to fly on his own, and to create his own creations—what we would call an entrepreneur today—rented a space on the same Place Vendôme, between the establishments of the best perfumers in France and Paris. There, he opened his business presided over by a large sign that said, ‘The Best Perfumer in this Square.