“We are so unique we don’t face competition” stated the CEO to me.
Is this correct? Can you really afford the complacency of believing you are better than the competition? What does such complacency lead to?
Management guru, Tom Peters summed it like this:
The principal reason, invariably, most successful companies rather quickly become also-rans, or just amorphous blobs on the competitive landscape, is their failure to re-tool in anything like a fundamental way. In fact, the worse things get, typically, the more they dig in their heels and defend yesterday’s turf”
Does this apply to you?
In reality, unless you are providing a monopoly service (eg Utilities such as power or water), then every business faces some level of competition. With each passing day, market forces trumps your corporate strategies – eroding your edge, making your business a bit more commoditised. This is why your growth plan is never finished.
The End of Competitive Advantage by Prof. Rita McGrath (Columbia Business School)
Every successful business that we have worked with embraces valid competition – it pushes them to do better. Customers can also evaluate the real value that is being delivered – making them engage more deeply, once they choose your offering.
Even if you’re the only business service within your immediate radius, you will be competing against other businesses where your customers could potentially spend their money instead of with you.
With the disruptive impact of the Internet and the resulting changes in buying behaviour, customers can easily find, compare and purchase alternatives with a few clicks. You are no longer just competing with your immediate geography. Even the customer who is about to purchase from you, could easily compare you against your main competitor or talk to your other customers about your service, using their smartphone.
What can we do about competition?
The key to the success of your business is establishing a unique market niche. To identify your unique niche, you will need to compare your business to several of your nearest key competitors. Be honest with yourself – the purpose is to help identify areas where you have a clear difference.
Your competitor could also be a new business offering a substitute or similar product that makes your own redundant.
In summary, the 3 key questions to ask when developing your competitive strategy are:
- Who are your real competitors?
- What can you learn from your competitors strengths and weaknesses?
- How can you act on the opportunities and threats that result from this examination of your competitors?