With a good understanding of the competition facing your business you’ll be able to spot and exploit opportunities as they develop. Ignoring the competition or letting success lull you into a false sense of security could mean nasty surprises further down the road. The following points can help you start developing a strategy:
Identify your competitors: Your competition includes anything that could draw customers away from your business. For example, for a movie theatre, other cinemas represent a direct competitor. But there are also a number of indirect competitors that need to be outmaneuvered as well. These are businesses after the same customer dollar, as you. For the movie theatre, cable TV networks, DVD rental stores and even online movies all represent competitors.
Be a customer: Take yourself to your competitor’s and play at being a customer. Testing a competitor’s ability to serve you will reveal much about their business practices. And don’t stop at asking about things—test them out by buying something. It’s the only way to gain first hand experience with the company’s products and customer service.
Talk to your competitor’s customers: Why do they buy from your competitors? Is it because of the quality of the product or service, the price, the location or the customer support? What do they dislike about the company? What do they wish that company would provide? Could you provide it?
Use the internet: You can also learn a great deal about competing businesses simply by going to their website. Check out how they arrange their pages and navigation, what information they offer, how easy they make the purchasing process and so on.
Attend industry conferences and trade shows: Your competitor’s representatives will be pounding their chests about their products or services. Take advantage and familiarise yourself with their product offerings, strategies and how they sell themselves.
Be aware of the potential for new competition: The competitive landscape can change fast these days. A national chain may not have entered your region yet—but what if it does? Likewise, companies that don’t currently compete with yours might shift their focus and pit themselves against your business.
Assess the competition’s goals: A competitor trying to increase its market share might lower prices; a company attempting to increase profits may cut costs; and a business that wants to accelerate sales growth might kick off a marketing campaign. If you know your competitor’s goals, you’ll be better able to anticipate their strategies.
Check public filings: Companies are obliged to disclose various pieces of information to government agencies. Such disclosures are required to undertake public offerings, receive building permits and register for patents or trademarks among other things. Many of those filings are public record and contain information about the company’s goals, strategies and technologies.
Gathering information about your competitors will show you where you lag in the competition stakes and can suggest ways in which your company can match, and beat, them. SOURCE NOTE – RAN One