From sports to politics and everything in between, to gain competitive advantage and ‘win’ in your space, you have to know what you’re up against. This is ever more prominent in the world of business, where several other companies are competing for your customer’s attention and, ultimately, their cash.
By understanding exactly who your competitors are, and what they are offering, you are best positioned to set your prices competitively and to market your products and services in a way that stands out. You can also assess any threats posed by both new entrants to your market and current competitors.
The following are the essential steps to follow for assessing your competition:
Step 1: Know Who’s In Your ‘Space’
Your ‘space’ is probably bigger than it first seems. All businesses face competition. Even if you’re the only restaurant in town, you must still compete with cafes, bars, cinemas, and other businesses where your customers may choose to spend their money instead of with you. Furthermore with the increasing use of the internet for buying and researching products and services, you need to bear in mind that you’re not just competing with your immediate neighbours, but also those online.
Remember, your competitors may not be businesses selling the same or similar products or services as your own, they could be a new business offering a substitute or similar product that makes yours redundant. Knowing your competitors means more than simply researching what’s already out there. You also need to be constantly on the lookout for possible new competition.
Step 2: Understand How These Businesses Are Perceived
With the vast number of businesses out there, it’s likely that one, or more competitors will be offering an end product or service that’s similar to yours. Today’s savvy consumer recognises this, and so the edge you have over your competition is likely to come down to an emotional connection through your point of difference.
If you want to ‘win’ the customer, you have to think about brand positioning. In order to ensure your brand stands out, have a look at what your competitors are saying about themselves, and how their brand is perceived by consumers. By doing this, you can make your own positioning different so that you can stand out from the crowd. The more relevant and engaging it is to your target consumer, the more likely you are to be their preferred choice.
Step 3: Apply This Knowledge To Your Advantage
By evaluating the information you have about your competitors, you may find a gap in the market that you can exploit. It should also indicate whether there is a saturation of suppliers in certain areas of your market, which might mean your business should focus on less competitive areas.
Remember … Innovate Don’t Imitate
It’s not enough to just know what your competitors are doing, and copy them with the hope that it will also work for your business. The key to gaining true competitive advantage is to look at what your competitors are doing, and work out how to do it even better in a way that offers more value to your customers.