Every business has competition. To enter the competition with an ideal position and become an industry leader, an enterprise must constantly learn from its competitors. Companies that do so are more likely to succeed. The following tips about what should be learned from competitors may help you re-examine your learning list.
How Much They Charge. Price is crucial in competition because it is a primary positioning indicator. Prices place goods/services in different market segments. When the price is right, customers are willing to pay for the good/services value. But this ‘right’ price is a comparative term because it has to be right in both value reflection and price competition. When an entrepreneur knows his/her competitors prices, he can adjust his own accordingly. By reaching a balance between the number of customers and the price, he/she can maximize revenue.
What Their Main Value Proposition Is. Value proposition is the reason the customer should buy the product, as stated by the business (usually found on packaging or marketing materials). A product/service may have many features, but most important is communicating the correct feature combination to the customer’s needs and wants. It can be difficult to tell what these features are if you are a new company, but looking at existing companies value propositions can help you learn what customers desire.
Why Customers Like Them. Your competitors must be doing something right to attract enough customers, and may even build brand loyalty. They may be doing things you are not. Or, they may be doing the same things as you, but better. It is always necessary to learn from your customers proven ways of success, and see how they can be applied to your own business. A new business can gain advantage by implementing some of the same aspects that make competitors successful.
Why Customers Dislike Them. No business in the world can satisfy all needs and demands. Even leading businesses of their industries often have dissatisfied customers. The reasons could be prices, services, product quality, payment methods, ect. By learning and analyzing these unmet needs and demands, you can provide value to your potential customers. Finding a way to satisfy those market needs can be a huge advantage.
What Your Advantage Is against Them. A new business owners strategy should have some focus on rivalry and defeating the competition. Knowing your advantage over competitors gives you measurable methods and concrete ideas of how to enter the market at the position where you can outperform your rivals.
Getting to know your competition is critically important, and to learn it before you get into the market and launch your business. Writing a business plan is one of the most effective ways to analyze the competition. In the business planning process you will learn the details of your competition, and then be able to strategize accordingly. Planning enables you to position your product/service in the sweet spot and leverage your comparative advantage against your rivals, and gain lasting success. Once you launch, dont forget to monitor your competitors and continue to improve.
Don’t forget to sign up for The Startup Garage’s RSS feed!