Making your competition work for you

We live in competitive times and all businesses are invariably competing with rival firms for sales. For small business owners, the competitive threat is significant, not just from their peers who are of roughly the same size, but from large, all-powerful corporates or entities who can destabilize smaller businesses simply by venturing into their market.

Entrepreneurs and business owners therefore need to take a leaf out of the bigger companies when it comes to dealing with competition. Take the example of Linkedin, a hugely successful professional networking site that began to look a little outdated and less engaging when compared to Facebook and other networking sites.

To stay relevant and continue to engage its millions of users, LinkedIn has been making several changes to the site including individual and company profiles now look modern, users can post status updates and have the flexibility to add apps to their profile. Instead of sticking to an old way of doing things, Linkedin tracked its competition saw what was working and learnt from their successes.

Many large companies have dedicated strategy teams whose only goal is to track the competition’s moves and make recommendations to counter them. For smaller businesses, the owner must assume this role single-handedly. Below, we set up some ground rules for competitive monitoring that you must put in place immediately:

Map your competition
Identify a maximum of five-six companies in your industry that are your direct competition. If there are dozens of competitors, consider aggregating them into five or six groups so that you can manage their monitoring. Also, monitor the large enterprises which may not be currently present in the market you are working in, but could likely make an entry at some stage in future. Your mapping can divide the competitors into two groups: direct, active competitors that you will track on a priority, continuous basis, and inactive competitors that you will be counter only in case of major events. This way, your attention will be focused on competitors that matter the most.

Monitor their Product
You must constantly compare your products or services with those offered by your competitors. Is there a feature missing in your product? On the other hand, can you add a new feature or freebie to make your product standout in the competitive world? Are you putting a different spin on your offering?

Monitor their pricing
How do your products or services compare pricewise? Are you competitors selling at a higher margin in a remote market? Are they offering larger discounts on bulk orders? Do you have the necessary intelligence in the market to track your competitors pricing strategies?

Watch their marketing
Keep a close eye on how your competitors are attracting new customers and how they are positioning themselves in the market. Are they targeting a specific segment of customers to make higher margins? Do they have a website or a mobile app when your business does not? What special offers are they making?

Monitor their organization structure
Are they structured differently from your business? Do you have an in-house design team when they are working with freelancers? Does it allow them cost efficiencies? Can you replicate their structure or are you confident that your structure works better?

Monitor their technology adoption
Does your competitor employ a new type of plant or machinery? Is it helping them develop new products, or create new markets, or save costs? Do they have state-of-the-art office infrastructure – with thin and light PCs, cloud-based applications and wireless-enabled printers, which are helping them serve their customers better? What can you do to stay ahead on the technology curve?

Look who’s working with them
The level of expertise in your competitor’s business can pose a major threat to you. Collect some intelligence on the kind of skills that employees in your competitors businesses have and see if there are gaps that exist within your own organisation.

Just as we can learn from successful competitor strategies, learn from your competitor’s failures as well. If your competitor has made a couple of wrong moves, it serves as a warning about the kind of pitfalls that your business could encounter down the line.

Make competitor review and analysis an integral part of your business, right from day one. Remember when it comes to competition, don't just get even, look at ways by which you can get better than your foes in the market.