Author: John Park, Texas A&M University, email@example.com
It is the nature of competition that firms will strive for advantage over their rivals. As such, rivalry is typically the strongest of the five competitive forces in any given industry. It can be defined as the competition that goes on between firms as they try to increase their market share. For example, this can be viewed as the competition that the cooperative faces when members look elsewhere to gin their cotton, sell their products or purchase their supplies. Due to the nature of agricultural commodities, this rivalry usually focuses on price competition, with firms attempting to provide the lowest price possible for farm inputs and the highest price possible for farm outputs.
This reveals one of the many challenges of cooperative management, rivalry on more than one front. Many cooperatives find themselves competing for the sale of outputs in addition to competing for the participation of their member-owners. Some cooperatives have a supply relationship with their members, some have a customer relationship with their members and some have both. Needless to say, cooperative management is a complex task requiring complex strategy and direction to support it.
What is the best strategy for a cooperative business to use to provide it with a competitive edge over its rivals? Each firm’s strategy depends on the strategies of rival firms and the willingness and ability of all firms to put resources behind their efforts. Although rivalry is dynamic and ever-changing, several common factors influence competitive rivalry:
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