If you’re launching a business, if you’re running one or graduating into a high level decision making capacity you’ll likely be all over consumer research from day one. If you don’t know who your customers are, and have some idea of how you can supply their needs in a way the competition can’t, then you lack the core motivation for starting a business at all!
But it’s vital not to ignore the other side of market research. Your market is made up of two key groups: your customers (or potential customers) and your competitors. You need to have a strategy that accounts for other businesses in your niche competing with you for your customers, and that anticipates and responds to their moves.
In spite of the article title, there are no right ways or wrong ways to approach competitor strategy but there are constructive ways and less constructive ways, and that’s what we’re looking at today.
Constructive: Identify
The first and most important thing you can do is identify who your competitors are, and what sort of threat they represent to your chances. Without this initial insight, your ongoing strategy has no foundation. Market research companies can help with this – competitive market analysis is a useful process that yields actionable insights for your business whereby the competition in your space is identified and ranked according to key indicators (like spending power, growth rates and so on) both in absolute terms and also against you, so you can see where you stand in a crowded marketplace, who your peers are and who represent the mountains you need to climb.
This is the basis for a constructive, productive competitive strategy.
Less-Constructive: Dominate
Planning to dominate the market is not a constructive way forward, nor realistic except for a tiny number of the very biggest companies in specific industries. If your plan is to outspend the competition and become the biggest and best, you will hit a wall sooner or later and run into difficulties. There are useful case studies in this area – look at Uber or some of the big TV and movie streamers. All these are businesses that made a run on crowding out the competition with their deep pockets enabling loss leading prices and big spending on advertising and content, and many of them have hit a wall and had to raise prices or limit access without being able to effectively edge out the competition.
Constructive: Know Yourself
Self knowledge is the most important knowledge and that’s still true in the world of business. If you want to steer away from that non-constructive path of simply trying to dominate, you need to know what you’re valued for by your customers so you can lean into that unique offering and find your own place to excel. Success in business doesn’t require winning, it just needs you to find white space in the market, in the calendar and in customer’s minds to get a fair hearing.
