Competition is clearly part of any free-market economy, and quite frankly, a little competition is a very healthy thing. That being said, competition can quickly transition from serving as an incentive to stay on your game to an outright disaster if your company, product, service, brand, and talent are not up to par with others in your industry. As a CEO or entrepreneur, how you choose to position against competition has a direct impact on the success or the failure of any enterprise.
The name of the game when it comes to dealing with competition is to create separation. You can significantly increase your chances of leading the pack by creating a competitive edge.
Having a competitive edge simply means possessing either a strategic or tactical (preferably both) advantage over your competition.
A good competitive advantage doesn’t usually materialize by osmosis, but rather it is normally established as a result of solid strategic planning and strong operational execution capabilities. The first step in the process is to understand your market. Before you can even remotely begin to accurately identify your competition, it’s crucial to first define and analyze your target market(s) by conducting some preliminary market research and business intelligence.
It never ceases to amaze me how many organizations fail to validate proof of concept before making huge financial commitments and embarking on flawed initiatives. At a bare minimum at least adhere to the basic process outlined below which will allow you to validate your business logic: What are you selling and to whom is it being sold? Next, make a list of those companies trying to do the same. What are their strengths and weaknesses, their strategies and goals and how do they position themselves in the market and attract new business? What, if anything, makes them stand out from the pack?
If you don’t currently possess the vital information mentioned above, I recommend moving heaven and earth to acquire it quickly. I’m not suggesting that you operate in awe of your competition, nor do I believe you should fear them. That being said, you absolutely must find out who they are and what makes them attractive to current and potential customers. Assessing your competitors openly and honestly will play a key role in helping you develop a competitive edge.
Remember, winning companies aren’t successful by accident, though often it may seem that way. A closer look usually reveals that most have sized up their target markets and zeroed in on a unique approach to meet their customers’ needs, values and expectations. Through important considerations like location, product, services, and product features, they have somehow found a fresh spin, a new way to offer buying incentives that similar companies either can’t or don’t offer.
Once you have developed a competitive edge, maintaining it will be a constant challenge. It will require you to move from retroactive to a place where you are forward-looking in your approach. Do this to forecast where the trends and changes in your industry will come from, and what your company can do to stay ahead of the curve. Maintaining competitive separation demands that you continuously track your competitors and their future plans. You will also need to recognize that through over time your market is likely to change and evolve due to any number of circumstances, many of which may be beyond your control. Your company must be flexible and willing to change as well.
The following 14 questions are designed to help you determine whether your company has a competitive edge:
- Does your company have a clearly defined vision, mission, and strategy?
- Is your target market accurately identified and understood?
- Who are your company’s primary, secondary and emerging competitors?
- Does your company have an ongoing business intelligence effort that tracks ongoing competitive efforts?
- Does your company exploit its competitor’s weaknesses?
- Does your company assess and learn from both internal and competitive mistakes?
- Does your business leverage competitive opportunities?
- Does your company possess a uniqueness that easily separates it from competitors?
- Given the choice would you use your own product or service or that of your competition?
- Does your company command a premium or discount price and is this by design or default?
- Does your company regularly assess customer loyalty and satisfaction?
- Is your company sensitive to customer needs and requests?
- Does your business focus on innovation?
- What is your company doing today to ensure that it has the capabilities and resources to compete in the market five to 10 years from now?
The bottom line is this…Given today’s competitive market, if you continue to address the competition in the same fashion that you have in previous years you will see your market share erode, your brand goes into decline, your talent and your customers jump ship and your potential never be realized. Remember…Disrupt the competition and prosper; don’t and suffer the consequences.
