To know your competitors is to know your market and knowing this is the first step towards success.
Looking at and knowing who your competitors are is one of the most significant parts of business planning. Competition exists in every field and it is vital to a well functioning market economy. It can be good for business in maintaining competitive prices and providing an incentive to consistently improve and innovate. When companies compete with each other, consumers get the best possible offerings; be it price, quantity or quality, meaning that both companies and consumers can benefit from competition.
Why is competition good for my business?
Being an only player in your field can make it difficult to improve or diversify. If you are in a crowded market, you will not be successful by doing what everyone else is doing, therefore, healthy competition encourages change, allowing consumers to distinguish you from other businesses through elements including price, offering, customer service or quality.
Why is understanding my competition so important?
Understanding what your competitors offer and what they are doing, fundamentally, helps you to stand out. Knowing what they are up to from a strategic and performance perspective can help you to:
- Set up your product / pricing strategies more efficiently in the market place, establish relevant and successful sales and marketing techniques all to improve company performance, increase efficiency and, in turn, gain success.
- Understand the marketplace in greater depth. Competition forces you to focus on your core audience. Challengers to the market encourage you to better understand the market place and, in doing so, establishing a better offering from yourself.
- Understand your own competitive advantage and where you hold that advantage
- Target your efforts and help you to develop your style. Copying someone directly very rarely leads to success. You need to stand out in a crowd!
- Learn more because seeing what your competitors are up to can teach you things about business and help to show you what works, why, and how, as well as what doesn’t. Learning about your competitors can teach you about failure which can help you not to make common mistakes. You may find your competition has a lot to teach you.
- Innovate, by looking at others’ motivations and ideas. It can lead you to see more exciting opportunities and develop new ideas which you may not have thought of without the analysis.
- Predict trends, because you will begin to see patterns emerging when looking at what competitors are doing and saying.
- Be proactive! Change is constant and in a competitive industry they can happen quickly. Staying ahead of the game is vital for success.
- Keep you focused and shake off complacency. Consistently trying to innovate and better yourself are vital for success both individually and for a business.
Why is competition healthy?
Competition is healthy both for you and your business and shouldn’t be feared or shied away from. It is possible to compete on friendly, respectful terms and this alone can help strengthen and grow the market within which you compete. Knowing the competitive environment you are competing in will enable you to compete successfully.
Without competitors, there would be no market for your business. They help create the gap within which your business competes, so embrace them, learn from them, follow them and even reach out to some them. For example, if they have had successes in a new distribution system or customer experience maybe you should look at yours. At the end of the day, businesses, no matter how successful they are, are made up of every day people just like you. Just don’t forget, its about innovation and keeping up with the market, not imitation.
How can I learn more about competitive analysis?
We cover competitive analysis and how to do it in our Business Planning Workshops, including a sample spreadsheet to help with your research.
Our next workshop is in Andover, Hampshire on 20th May 2019 9.30 – 2.30pm. Join us in Business Planning for Success. Please email for more details: email@example.com