What does a Competitor’s Crisis mean for You?

The image above is from mediafirst, a firm that offers media training including a specialty in crisis communication.  I am not endorsing any products but they do make some interesting blog posts about crisis communication.  Is a competitor’s crisis an opportunity, and warning, or both?  The advice being offered is not to exploit a competitor’s crisis (opportunity) but to use it as a crisis preparation opportunity.  The competitor’s crisis is a warning that this can happen to you.  to handle that crisis.  That is very sound advice.  Organizations should regularly review their crisis preparation.  A competitor’s crisis is a good hook to review preparation and to even do some training related to that crisis.  The crisis could easily be converted into a tabletop exercise for the crisis team. Sometimes a threat is an opportunity.

 

We also should consider the larger implications of the crisis.  As the blog post notes, a crisis can cause an entire industry to come under scrutiny.  Crises can trigger government regulation and spillover to others in the industry.  A poorly handled crisis indicates a risk the government may need to manage through regulation.  Some of the early food regulation in the U.S. was a result of Upton Sinclair’s The Jungle.  My earlier posts about the cantaloupe crisis is an example of spillover.  People were afraid of cantaloupe and did not limit the fear just to the small percentage of the product coming from the affected farm.  We see similar effects for a variety of food crises including apples (Alar) and spinach.  These food items are what is known as undifferentiated products.  The products are seen as very similar and consumers will easily substitute one for another.  This is very different from differentiated product that stand out from one another often featuring strong brands.  People did not worry about buying any car during the Toyota break crisis, just certain Toyotas.  A spillover is much more likely when a product is undifferentiated.  That means if you are in an industry where your products are undifferentiated, be prepared that a competitor’s crisis could become your crisis.  You will need to monitor the situation very carefully for spillover.  At the first signs of spillover, you will need to deploy your counter measures to prevent spillover damage to your organization.  Preventing spillover is challenging because of the nature of undifferentiated products but crisis communication should seek to contain and limit the damage a crisis creates for the organization and its stakeholders.

 

Question to Consider

 

  1. What are the risks of trying to use a competitor’s crisis to create a competitive advantage? The possible benefits?
  2. How would you know if crisis spillover is occurring? What would some of the warning signs be?
  3. How can social media be used to monitor and to respond to spillover?
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