“If you try to remain unique, you will be the only one,
If you try to be the best, you will be number one”
In the current pace of globalization, it is considerably easier and accessible for most of the business enterprises to acclimatize the things already present somewhere around instead of begetting new model. However, market-creating innovations are comparatively more indispensable which generally enhance business’s economic growth. Here is a business success formula which can actually appraise a business organization to create a monopoly and not just be a part of the competition. “Improving 7/10 is far better than improving 3/10”, the formula which constraints on identifying and improving the competent core areas of a particular business instead of mounting the unproductive sections of the business.
A business organization needs to break or change the rules and create new strengths by adopting a monopolistic success formula. This formula will augment business firm in a feat of success and profitability in turn. Because being in a competitive market it leads you facing more marketing challenges while a monopolistic market actually drives you towards grabbing the complete market share. Monopoly is the situation where an organization can regulate the price of products & services by creating various entry barriers for other players to cut the competition. By taking into consideration few more tips an entrepreneur can build their monopoly in the market:
Intellectual Property Protection
If you have come up with a new trade secret, get it protected by getting exclusive legal rights from the government in order to keep limited monopoly power in the market. This is the way to scale up your business by creating an entry barrier in the market. For example, Pharmaceutical industry manufactures two types of medicines; one is generic and another is molecular. Generic medicines are made for normal utility just like substitutes for others but molecular medicines are specifically produced through advanced research and development done by the pharma company which no other can use the formula due to patented mark on it.
Strong Distributor Network
There must be a strong distribution channel with the business partners which helps in taking competitive advantage. A long-term association can be ensured by providing proper marginal value to the intermediaries who are directly or indirectly associated with the business. This strategy aims to create a good entry barrier in the market.
According to your nature of the business, an exclusive access to an international product for making sales in home country can be reserved by taking the grant from the related country. This strategy helps in creating differentiation in the market. For instance, few mobile phone companies give exclusive rights to retailers like Flipkart and Amazon.
Economies of Scale
Another strategy for an entrepreneur to create a monopoly is to sell the products in large volume at a lower margin. The policy of centralized purchasing adopted by the companies generally enhances the scale of business which causes a reduction of average cost per unit. This economies of scale strategy discourages competitors to enter the market. Electric power, domestic utilities and Gas services are few examples of economies of scale.
With the uniqueness of your technology, it not only allows you to enhance the competitive advantage of your business but also makes your product impossible to replicate. This is another form of licensing strategy which allows businesses to create customer loyalty.
High Capital Investment
You can create an entry barrier by investing in new technology like Reliance has adopted marketing strategy for “JIO” in networking segment. New invention or research tends to create a monopoly in the market. The existing firms can also create an entry barrier by investing in new market technologies according to the market requirement.
Creating a good brand name can be another strategy to create a differentiation in the market and enhance customer loyalty. It is the value which creates perceptual experience among the customers’ mind for a particular product.