Tuesday, June 28, 2011

How to Deal With Your Competitors Professionally

In today’s competitive world, every business has competition, and if you do not have, one will show up as soon as you start to operate. For any small business owner, competition is a reality and you must thus be prepared to compete and win. To get a clear perspective of the game, let’s pose and ask; who is your competitor? Your competitors are companies that satisfy the same customer need as your company.
 Now, there are two schools of thought on how to deal with competition: one school says that you should strive to kill or eliminate competition and the other one acknowledges that competition is there to stay in a liberalized market; hence companies have to find strategies to deal with it. I am of the latter.
The first thing to do is to identify your competitors.
Ascertain their strategies, their objectives; find out what is the competitor seeking in the marketplace? What are their strengths and weaknesses? Answers to these questions will provide you with information for developing sound strategies to outperform your competitors.
After identifying your competitors, define your market. For a small business entering the market, it is advisable to aim at a niche market rather than the whole market. Decide to be a leader in the niche market. This way you avoid competing with larger firms by targeting small market of little or no interest to the larger firms. Niching achieves high margins which enables your business to grow rapidly.
Due to fierce competition even within the niche market, your company must continuously innovate so as to stay ahead of competition and tap into high growth segments like the youth.
Another strategy of dealing with competition is to specialize. You can specialize in some of the following roles:
·         Customer-size specialist; where the firm concentrates on selling to either small, medium sized or large customers.
·         Geographic specialist; where the firm sells only in a locality, region or area of the world.
·         Quality price specialist; where the firm operates at the low or high quality ends of the market.
Focusing too much on competition has its negative side; the company is too reactive. Rather than formulating and executing a consistent, customer centered strategy, it determines its moves based on competitors moves. It does not move towards its goals. Put your efforts more on the customer. Being customer centered  will  enable your company to better position itself  to identify  new opportunities  and set a  course  that promises  to deliver long term  profits .By monitoring customer needs  it can decide  which customer groups and emerging  needs  are the most  important  to serve given your resources and objectives
As important as a competitive orientation is in today’s global markets, companies and small business for the matter should not overdo the emphasis on competitors. Strive to maintain a good balance of customer and competitor. This gives you strategic advantage and positions you to win.
I d love to hear your comments . Thanks for reading

To Your Success!
Patrick
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