If you have been in business long enough you have faced an ever changing external environment (competitors, products, services, technologies, pricing structures, etc.).
While it is likely you have gotten better at measuring and improving your bottom line, it is extraordinarily more difficult to get ahead of the curve to develop long-term strategies designed for sustainability.
Strategic planning is a tool and a process that enables business owners to think in a ‘forward-thinking’ way. While biting off an entire planning process can be overwhelming (see Flying Without a Plan What You Should Know), there is one part of the strategic planning process that can be tremendously valuable even as a stand alone activity. It addresses what you should know about your competition.
ASSESSING THE COMPETITION
The better you understand your competition, the more effective you will be in positioning your business. Why? There are a number of reasons, beyond the obvious one- that your competition may be put you out of business! To name a few:
- Evaluating your completion can uncover useful best practices
- You may find gaps in what your competition provides in meeting market needs
- Understanding what other do, you may find a better way to position your strengths
Let’s start by defining competition. Competition comes in different forms. It might look like:
- A business that offers the same or similar products or services right now
- A business that could offer the same or similar products in the future, or
- A product or service that could remove the need for your product or service
Before you begin researching the market, clearly define what information you are seeking. Start by asking the following questions.
- Who are the competitors in each of our markets?
- What distinguishes us from our competitors?
- What distinguishes our competitors from us? – How well do we do versus our competition in quality, convenience, versatility, design, performance, cost, response time, introduction of changes, other areas?
- What are our strengths relative to our competition?
- What kind of company could put us out of business, and how could we become that company?
If you can’t answer these questions with current information, it is time to start researching
How you learn about the competition can range from a casual conversation with your customers, to the most complex software surveillance. The Society of Competitive Intelligence (CI) Professionals describes CI as “the legal and ethical collection and analysis of information regarding the capabilities, vulnerabilities, and intentions of business competitors.”
There is a comprehensive range of business information as well as business intelligence (analytical and monitoring) software, or as an article in Smart Money once described these tools, “a better ways to peek into one another’s keyholes.”
There are a number of excellent source of industry information online. A few good ones include Dun and Bradstreet, Integra Information Systems, IMarket, RMA Associates.
If you are on online business owner or if you don’t have a retail location for your business you can also do a lot of research online. Compile a list of keywords your customers might use to find a business like yours. Look the keywords up in the major search engines and identify the top companies from each search engine.
Go to these websites and start to look at their offerings, their pricing and anything else you can find out to start to answer some of the questions above. You will want to track your research over time, so create a spreadsheet. Regularly revisit the websites of your top 5 competitors.
Other good resources for competitive information include: the press, trade fairs, published market research, financial reports, advertising, and even personal visits if possible.
Success is ultimately driven by meeting your customer’s needs. By keeping a pulse on the competition you will continually see new opportunities to strengthen, innovate and differentiate your products and services to better serve the customer.
Written by Helene Mazur
Helene is the founder of Princeton Performance Dynamics, an executive coaching and strategic planning facilitation company for business and non-profit leaders and their teams. Helene’s passion is helping her clients to focus their goals, see new perspectives on their current situation, put in place realistic, motivating plans, and execute to achieve new levels of success.
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