What are the biggest mistakes companies make when it comes to handling competition? originally appeared on Quora, the place to gain and share knowledge, empowering people to learn from others and better understand the world. You can follow Quora on Twitter, Facebook, and Google Plus.
One of the biggest challenges today is actually defining: who is your competition (today), and who will your competition be in the future. I discuss how to best handle competition in my book, Growth IQ: Get Smarter About the Choices that Will Make or Break Your Business.
It used to be that large corporations owned entire industries and captured large market share - they were the brand that consumers would turn to when they were looking for particular types of products or services. That is no longer the case. With the advances of technology, especially mobile (smartphones), social (internet), cloud (apps) and online commerce – even the smallest of companies, from emerging markets can become a formidable competitor to a large incumbent brand.
Too many companies ‘benchmark’ their company against their rival or set of competitors in the same industry. While benchmarking can be a worthwhile exercise, it can also lend itself to a limited view of what is happening in the overall market (not to mention that by the time you wrap up any benchmarking research, the market may have moved past the lessons you’ve learned).
Widening the lens to look at overall context, on the other hand, allows companies to look for best practices from other sectors and learn from innovation happening across industries. What is happening in consumer spending patterns? What technology advancements have happened which you can capitalize on? How are people engaging with brands? What is the sentiment towards big social issues? The insights we can glean from these questions are invaluable when setting a growth strategy. For example, if Netflix had launched 5 years earlier when DVD prices were still high or if it launched streaming before broadband had made its way into homes, they would have had a much more difficult time.
A key thing to remember as you set out to reenergize your growth efforts: a company can attempt to duplicate of growth strategy from any industry rival, but rarely is it able to recreate a particular growth path (how a company grew) along with the exact same combination or sequence of efforts, within a particular market context, that led to that rivals success.
You have your own uniqueness. Your people. Your products. Your values. Your customers. There is no other company exactly like you. That uniqueness can be a key differentiator to remove the threat of a perceived competitor. Watching the competition, and changes in the market should always be part of a regular planning cadence – ensuring that your growth strategy remains aligned to the current market context. However, don’t let it distract you so much that you are constantly chasing another company and ignoring what makes you unique.
Similar to doing an inventory of current growth efforts, you may want to consider doing a SWOT (Strengths, Weakness, Opportunity, Threats) analysis. This will allow you to conduct an internal examination of both your strengths and weaknesses, look externally to identify unmet market opportunities and threats, and then synthesize all of your findings into your planning process. Once you have a handle on your competitive context this is where you can start to make investments which will have the greatest impact on your future growth potential.
The key thing to keep in mind with any type of competitive assessment is frequency (how often do you do this exercise), and who you decide to explore. You would be remiss if you only did a competitive review once a year – and you might set yourself up for an unexpected surprise if you only analyze existing competitors. Understanding the competitive landscape, and making recommendations on changes to the business could very well be a full-time job, so unless you are able to allocate dedicated resources to this effort, you have to be focused and clear on how best to stay informed so you can not only run the business better, but also set yourself up for future success.
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