Who determines the prices you charge? Your level of sales? Your market share? Many people answer, “My customers.” Others claim, “Myself.” Certainly both are key determinants of your ultimate business success. But the primary determinant is neither. It is your competition in the marketplace. For this reason, it is essential to thoroughly research your competitors and know them as well as you know yourself.
A common mistake made by many entrepreneurs is to look down on the competition, find fault with them, criticise them and make light of them. The smart entrepreneur respects his successful competitors, studies them and learns from them. Investigate your competition. What are their strategies and tactics for market penetration and market domination? How do they position their products or services? Why do people buy from them? What is their pricing policy? How do they service their customers? What is their approach to quality control?
Now, armed with a thorough knowledge and understanding of your competitors, turn the lens on yourself and your business. Consider these critical questions:
1. Who is your competition? Bear in mind that, in some instances, your competition may not be another individual or company but what may, at first, appear to be another industry. For example, a chief competitor of the cruise liner industry is land based vacations. Both industries are competing for the same vacation dollars.
2. In what ways are your competitors better than you? Be brutally honest!
3. In what ways are you better than your competition?
4. What are your areas of excellence? i.e., what do you do at least 90% better than your competition?
5. What is your USP (Unique Selling Proposition) – something that you do that definitely benefits your customers and that no other individual or company can offer? (This is what makes it “unique.”)
6. How will you position your product or service in the marketplace to capitalize on your areas of excellence and your USP?
7. How will you price your product or service in light of competitive pricing practices?
8. What sales and marketing strategies will maximize your chances of success?
To succeed in an increasingly competitive marketplace, you must be fully aware of the importance of competitive research, have a plan to conduct the research and be committed to carrying it out. Such a focus will greatly increase your odds of achieving your business and career goals.
Have a wonderful and productive month!
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