Business Tips-5 Steps to Outperform Your Competition
Posted: Wednesday, June 09, 2010
by Jason Dick
Northwest Computer Support
As a business owner, some of the most valuable information you need can be gathered by understanding your competition, both direct and indirect. Having a keen understanding of your competition helps you distinguish your business from others by defining unique areas of product differentiation. In addition, knowing your competition well allows you to brainstorm and meet extra needs that your competition isn't yet addressing. 1. Know your company: Developing or updating your business SWOT analysis should be the first step in understanding your competition. When you understand your own business, you will be better able to compare the competition. SWOT stands for:
Weaknesses: Deficiencies you will need to overcome to prevent business failure, which may include low capital, saturated market, poor location, etc…
Opportunities: Any trends that may lead to a positive competitive advantage, for instance, political or social trends, emerging markets or unfilled niches.
Threats: Trends that may have a negative consequence, for example, new regulations, increased market saturation, economic instability.
2. Know who your competitors are: Knowing your competition encompasses an understanding of both your direct competitors (those with similar businesses in the same product or service category) and indirect competitors (any product that goes after your target market's attention and money). Gather as much data about your competitors as possible. Research articles in trade journals about them, study their web sites, or even set up Google Alerts to your email for each of your main competitors. Save your research in separate files by competitor.
3. Compare and analyze competitor data: Once you've compiled files on your competitors, segment the data you've received into sections, and analyze it. For instance, take the industry leader, a company of mid-level performance and a company in the lower percentiles of the industry and study the practices of each one. Find out what is working for them and what is not, and determine your own strategy to both align yourselves with the leaders, and offer unique values that they don't.
4. Develop a solid differentiation strategy: The key to successfully competing is differentiation. Once you understand your business and your competition, it's time to roll your collective sleeves up, and make the competition irrelevant by creating a strong differentiation strategy. For products, you may differentiate by speed, color, or size, etc… For services, you may differentiate your business by offering varying service levels, value-added partners, or special certifications and abilities.
5. Communicate better than your competitors: To communicate your company's added value and out-communicate your competitors; it's important to understand your target market and be able to communicate to them, the "what's in it for me" proposition. Use fresh and exciting language and be concise, yet informative.
Remaining stagnant and operating in a vacuum will eventually leave your business lagging behind. By continually being on guard for market trends, competitive tactics and opportunities to differentiate; you will be able to keep pace with your competitors and hopefully gain ground through research and innovation. Knowledge is power and knowing your competitors is essential in today's rapidly changing economic landscape.
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