Do you think you know exactly where you stand in your business field?
Then you should be able to respond to these questions on an instant. Check out what you should be asking yourself about your company and your competitors.
Competitor analysis is a management technique used to examine strengths and weaknesses of current and possible future competitors. This type of technique is frequently used as a corporate strategy and it should be systematically and solidly done.
Analyzing competition superficially based on impressions, rumors, or subjective opinions, is a secure way to take wrong conclusions, and be sure that these wrong conclusions may lead sooner or later to a wrong business management.
Competition is actually a great opportunity to see where you stand and how your development strategy should be improved, in order to get better. Monopoly may sound like the best thing that could happen to your company, but let’s be serious, if you are not a billionaire part of some obscure mob, the odds of that happening are not in your favor.
So let’s see some of the basic questions you must find out the answer to as soon as possible:
- What major changes happened lately in my business segment?
- What others do and you don’t?
- Which are my competitive advantages?
- Who failed and why?
- Are you making plans that will drive your actions?
- Are your people the best people you can have?
This refers to new products, new manufacturing technologies, new groups of customers, new competitors penetrating the market, etc. Take into consideration as many aspects as you can, everything that is directly related to your business segment or just touches some small parts of the entire slice. This is the first step and will help you to have an overview on what’s happening and where you stand with your business.
Are they doing something radically different? Are they offering something more? Do they have a different type of clients? Should or could you do the same? Remember that it could be something that you’re overlooking, something very relevant, but there may be clients that pick your competition for that exact reason. Don’t be shallow, look closely to the differences and ask your clients what they think about a specific service or product. You may (or may not) be surprised.
What kind of competitive advantages do you have and how strong are they? Are they exactly what your clients are asking for? Could a competitor develop them pretty fast and make you lose this advantage? If you can’t identify some strong competitive advantages it should be an alarming signal and you should start thinking about building some from the ground.
What happened when somebody from your industry failed? Could it happen to your company? Do you have a backup plan? Many companies disappear in the first two years of activity and nobody remembers them, others reach the success and then miserably fail. You must look at the reasons why this is happening and also at why do clients move from one company to another and what’s pushing them towards taking this decision.
If this question scares you and you have only very vague ideas, it’s definitely a warning signal. What does this question has to do with competition? Well…you must have a strategy for the next years, a strategy directly related to your competitors. If you don’t see yourself among the best in the next years, you might be on a completely wrong path.
Are there any liabilities in my team? Should I expand my team? How can I help my team into developing new skills and acquiring more knowledge? Companies are eventually composed out of more than just one person, so if your people are devoted and successful professionals, then your company is highly probable to become successful too.
Having a niche competition is a good sign that people may be looking for what you have to offer…
but having too much competition is a clear sign that your product or service reached its maturity stage on the life cycle, and according to marketing theories, an ugly stage called decline will follow. That’s why you must always be aware of everything that happens on your business field and always be up-to-date with the latest news. I repeat myself, don’t rely on gossip, unless you want to take bad management decisions that could collapse your entire company.
At the end, I leave you with a quote of one of the people that really fought his competition on a daily basis…and won!
“You have competition every day because you set such high standards for yourself that you have to go out every day and live up to that.” Michael Jordan