The Importance of Knowing and Understanding Your Competition

“You can't look at the competition and say you're going to do it better. You have to look at the competition and say you're going to do it differently.” ― Steve Jobs

“How do we outperform the market?”

“We want more than our market share.”

“We don’t share our market with anyone!”

How many times has an individual in a leadership position heard one or all of these statements? Regardless of the type of business or organization occupy there are others in the same business, that are pursuing the same customers, and looking to dominate the market. To accomplish this, they must know a few things. What problems do those who look to purchase products in this marketplace encounter?  Markets are created by those who have the same or similar problem. They look for suppliers who can satisfy their needs. What problem does your business solve? Who else in the market is doing something to solve that problem? They are your competitors. Sometimes, they may not be direct competitors, but have some competing products.

One of the most competitive wars I see in the business arena is the new war in the transportation market. For many years the taxicab drivers were almost exclusive in their niche transporting individuals from point A to point B via a car or a van. It was a personal form of transportation. The taxicab did have some competition, there are more luxurious forms of transportation like limousines which are utilized for special occasions and buy some of the affluent and also by those in business who deem it appropriate or necessary.

The taxicab drivers and the companies compete with each other and indirectly with other forms of transportation like buses and trains. Recently, the market has shifted again, and new competitors have joined the competition in the form of Lift and Uber. Prior to the shift in the marketplace company companies understood who the other cab companies were in their marketplace and they competed tooth and nail for market share. The more complex companies, usually in the larger cities and metropolitan areas even took the time to analyze their position in the marketplace versus their competitors. An accurate way to look at this in nay business is to conduct what is called a SWOT Analysis. A SWOT Analysis begins with analyzing your organizations strengths versus your competition. Understanding where you excel is important, it allows you to focus on the areas that allow you to capitalize on what you do well.  One of the most important rules in any sales and marketing presentation is focus on your strengths and what you do well versus talking negatively against your competitors.   To accomplish this you must be very confident in what your strengths are, so looking at all aspects of your business makes you more aware and in tune to just what you do well, the things you may be able to work on that could help you improve your current situation or develop new strengths from identified areas of opportunity.

Once you understand the dynamics of your own organization you can then begin to look around your marketplace and identify those who are in direct competition to you and your team. There are many organizations or companies that may do similar things, but not all have to ability to compete with you. A great exercise that you can conduct with your team is departmental examination of the identified competitors. Have each individual department do a its own SWOT Analysis. There are unique strengths, weaknesses, opportunities, and threats in each department and most of your competitors have the same kind of operations or departments. Here are a few of the questions you should uncover answers to.

1.     How do you stack up against them internally?

2.     Are your departments performing as efficiently?

3.     Do they have the same structure?

4.     Are there opportunities that they are taking advantage of to streamline their efficiency, that you may be able to emulate or improve upon?

These are just a few examples of this that you should investigate. Remember leadership is responsible for helping the team uncover ways to perform at its optimal levels. Take the time to evaluate yourself as a unit first; identify your strengths, weaknesses, opportunities, and threats. Once you have your own information down and understood unilaterally throughout the organization, it will make it easier and more valuable for each member of the team to better understand your position versus your competition. This exercise will also allow you to create an atmosphere of inclusion for all involved where everyone contributes to the process and everyone is educated on where you stand in the marketplace.