Analyzing Your Competition
“Concentrate your strengths against your competitor’s relative weakness.”
There is a military adage that says, “No strategy ever survives first contact with the enemy.” No business strategy ever survives first contact with the marketplace, as well. It must always be adjusted to deal with the realities of the moment.
You have probably heard it said, “Business is war.” What this means is that there is vigorous and never ending competition to conquer the market, win the customer and achieve the sale. Just as you are eager to succeed by selling your product or service and earn a profit, so is your competitor. He wants your business and, if possible, all of it. To achieve this, your competitor will do or offer almost anything to take your customers away from you.
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Know Your Enemy
Here then is a question for you: Who is your competition? Exactly? Your choice of competitor determines almost everything you do in your market, just as the choice of an adversary determines everything a general does in the process of conducting military operations.
Your competitor determines what you offer and where you offer it. Your competitor determines your prices and how you charge. Your competitor determines your levels of profitability and how consistently you earn them. Your competitor determines your rate of growth and your very survival. Everything you do must be done with a view toward your existing or potential competitor, and his or her likely responses to your actions.
Determine Their Buying Motives
Once you have determined why it is that people buy from you, you must then ask and answer, “Why do people buy from my competitors?” What value or benefits are your potential customers convinced that they receive when buying from your competitor rather than from you?
What are your competitor’s key strengths? What are his areas of specialization, differentiation, segmentation, and concentration? What does your competitor have that you don’t have? What does he offer that you don’t offer? What is he doing more of or better than you? What is his unique selling proposition?
Many people dismiss or ignore their major competitors. They criticize or belittle them when their names come up. Often they think and say that customers who prefer competitive offerings are simply ignorant or misled. As a result of this self-inflicted myopia, they fail to observe and learn how to outdo their competitors in tough markets.
One of the most effective business strategies you can implement is to always admire your successful competitors. Never dismiss them out of hand. Study them. Learn from them. Respect what they are doing well, and look for ways to improve upon their best features.
Offset Their Advantages
As you study your competitors, look for ways to offset or neutralize the advantages their customers perceive them to have. What are your competitor’s weaknesses? How can you exploit these weaknesses? What do you do better than they do? In what ways are your products or services superior to their offerings? In what areas do you have a distinct advantage over your competitors? What can you do to offset your competitor’s strengths and maximize your advantages? How can you better position yourself against your competitors in a tough market?
The more time you take to study and understand why and how your competitors are successful in selling to your customers, the more likely it is that you will find an opportunity to take away their market share. As Sun Tzu says in The Art of War, “If you know both yourself and your enemy, you will prevail in a hundred battles.”
You Must Be Clear
The greater clarity you develop, and the more accurate you are, with regard to your competitors and why your potential customers buy from them, the better able you will be to counter them and compete effectively. Rigorous competitive analysis can be a vital key to business success. In its absence, you will always be at a disadvantage.
Analyze Your Competition:
- Who is your competition for what you sell, with the exact customers you are trying to attract?
- What would happen if you changed your offerings in such a way that you targeted a different group of customers, one that would be easier to sell to?
- Why do your potential customers buy from your competitors? What advantages do they perceive?
- What is your competitor’s unique selling proposition? What special feature or benefit does his product or service have that yours does not?
- In what ways are you superior to your competitors? What can you offer that they cannot? How can you emphasize this advantage in your sales and marketing efforts?
- Where is your competitor vulnerable? How could you exploit this to your advantage?
- How could you alter your marketing strategy in such a way that you could achieve dominance in a particular area, with a specific customer or market segment?
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About Brian Tracy — Brian is recognized as the top sales training and personal success authority in the world today. He has authored more than 60 books and has produced more than 500 audio and video learning programs on sales, management, business success and personal development, including worldwide bestseller The Psychology of Achievement. Brian's goal is to help you achieve your personal and business goals faster and easier than you ever imagined. You can follow him on Twitter, Facebook, Pinterest, Linkedin and Youtube.