We All Need Competition
This meme has been floating around social media for a few years and every time I see it I cringe. I get the point that the author was making ( I assume they mean to focus on your own grass, as they say) but, my conscience will not allow me to not address the errors in this line of thinking when it comes to business.
Thinking that one business, should not be concerned with the movements of their competition is close minded and as a business owner you must be able to look at the bigger picture. Businesses are pieces on a chess board and their movements can absolutely affect each other. You must be aware of the services. prices, and benefits that your competitors are offering because these decisions have a direct impact on your business. If you don't think so, what would happen if your competitor dropped their price by $20 for the exact same product you offer, and offered a buy one get one free for this item? Do you think some of your customers would be tempted to go buy their goods? Of course they would, this is why you need to be aware of the sales and specials that they offer. Any business owner that is not worried about their competition is not in a position to be competitive. All businesses should be performing a SWOT ( Strengths, weaknesses, opportunities and threats) analysis that will highlight where that business stands in its current industry.
Do not take this article to mean that your daily operations should include spying on your competition all day, but you should absolutely be aware of the large moves they are making. If they start offering a new service, cut or increase their prices, have a large sale you need to be mindful of the way it will impact your business.
Competition in business is what makes the world go round, keeps ideas fresh and prices low. The threat of competition makes engineers work harder to create smoother processes, it is also what keeps consultants in business. If there were no such thing as competition, industries would hold monopolies and that would prove to be catastrophic for other businesses and the economy in whole.
If competition was not a real threat we would not hear of large cases where teams and other businesses have been caught spying and stealing to gain an advantage. Two of these cases are the Patriots in the NFL, and car companies at auto shows. The bottom line is that to maintain an competitive edge you must be aware of your competition. Regardless of how we choose to look at it business is a competition. Business owners are trying to gain customers before other businesses, they want to gain a larger share of the market and increase their revenue. It is impossible to complete these tasks without awareness of the industry you are apart of.
A few questions that you must ask yourself when you are thinking of your competition and industry.
1) What industry is your business in?
2) How many direct competitors are in a 2 mile radius or 5 mile radius?
3) What products or service do you offer that are unique?
4) What areas do you need to improve on?
5) What does your competitor charge for comparable services?
6) Who are your customers