According to different business dictionaries, a business competitor is a person/company that provides similar products or services to what you exactly offer. Of course, competitors’ analysis and further positioning are crucial for each and every business. During the last two months, at least 4 of my permanent clients decided to rethink the list of their competitors and the exact meaning of the word competitor, as soon as the pandemic brought significant changes to the idea of the business world we had had before. Offline schools and institutes that o had been providing online lessons and courses only as a minor option decided to enter the new market of online educational services seriously. Kitchen stuff, clothes boutiques, and even car showrooms started looking for professional photographers, SMM specialists, and shipment service companies to gain some profit out of online sales.
Of course, I am not going to rewrite the classic process of competitor analysis or provide the definition of direct and indirect competitors. I just want to draw your attention to the fact that the more attentive you are while analyzing the target market, the better the financial results you’ll have in the future. There are three main things you need to check: who are your audience, who are your REAL competitors, and whether it’s better to enter the existing market or to create a new, your own one.
When we think about competitors, the audience, and the market itself, the first thing we take into account is the price. But now I’d like to suggest you look at the notion of quality first. For example, you are a small local business producing detergents. You have analyzed the possible price of your products. Your marketing team has found out that in the chosen price range your rivals are going to be a big international company, whose prices even with the cost of logistics are a bit lower than yours, and a big national producer with a good market share, but a bit higher price. Is that all? Does it mean that having got this kind of information, you can easily call the mentioned companies your competitors? Don’t rush to start designing a strategy to conquer the market and fight those two. Think about a couple of other details:
1. Analyze your product
As a famous proverb says: charity starts at home. So, before spending money on adds, talking to the procurement managers of the local shops and supermarkets, analyze your own product once again. Thinks whether it possesses the necessary POPs (points of parity)? Understand that the existing players in the market have made up a certain list of expectations among the potential clients, so your product lacks a couple of crucial ones, you need to think about how to solve this issue.
2. Would you like some PODs, sir?
What are your PODs (points of difference)? I don’t mean the color of the package of your product or the colors of your logo, though it may matter, those real peculiarities of your products that make it stand aside from the other potential competitors. Here, pay attention to the quality of your product and try to find the statement of uniqueness for your product. It has to be easily recognized by the audience. Think about how to make the PODs more visible and touchable.
3. Trends, trends, trends…
Take advantage of the new trends in the market. Remember that someone’s threat is someone else’s opportunity. I found myself developed a couple of habits in shopping during the quarantine. I enjoyed buying cosmetics online. It’s quick, safe, and I know I’ll get what I’ve just offered on the next day. My trusted online shop has some delivery facilities, so I don’t have to leave home to get what I need. Think about your audience in the means of how flexible they are in the ability to change their buying behavior and analyze how you can cover their needs in the cheapest way for them and yourself. One of my clients in Romania (a local grocery) offers a neighbors’ package option for the people who need to do their weekly shopping without going out. Neighbors can make their offers together (2 or 3 families), and get a special discount on goods in addition to the fast and free delivery. So, at first, people couldn’t leave home due to quarantine in different countries. But even after the lockdown easing, they won’t probably change the new habits that can optimize their time and costs. So, look at how aware of trends your potential competitors are. If they still prefer the grandpa’s good old marketing behavior, maybe you time has come to wipe them out of the game.
4. Agile, not fragile
What really matters nowadays, whether you are a small local company or a big global corporation, is being AGILE. Pay attention to your organizational structure. How long does it take you to make a decision? How painful can any change in an organization be for your employees? How flexible are your department managers? What can you do to make your company lose the weight of unnecessary bureaucracy? If you have found that your company is not agile enough/at all, don’t simply discard the resolution of this issue for better times. Think about the minimum you can solve now to make your organizational structure more agile. On the other hand, monitor how agile your potential competitors are because sometimes getting agile can leave those big market monsters far behind.
5. Think long-term
Unfortunately, business analysts agree on the idea that becoming a millionaire at one night is getting more and more impossible each day. So, though you might be sick and tired of the Bamboo business/brand growth theory, it remains real. Every player in the market, big or small, has limited resources. So, if your BP shows some real hopes for profitability, don’t rush and waste your resources purposelessly. You might lack money for many things, but your R&D activities are the constant priority. So be small like a bee, but think as if you are Alexander the Great. Always analyze your today’s, tomorrow’s, and a day-after-tomorrow’s opportunities. Your present behavior in the market is visible for competitors, but your plans are not. So, your strategy is your safe side. Don’t target only to take the market share of existing competitors. Always have an outlook for the future.
6. Digital tools and strategies
Look at the marketing instruments the existing players use to reach the audience and some possible gaps in their attention towards the valuable digital touchpoints. If you’re going to work on the SEO of your website, check what the potential competitors have done, how valuable their content is. On the other hand, analyze how often your target audience uses search engines to enter the funnel. If you’re going to optimize your presence on social media, analyze which of them are relevant and whether your competitors are actively taking advantage of the digital world. Is it hard to promote your product online in general? It’s obvious that as soon as you enter the phase of analysis regarding the digital touchpoints, the first thing you’ll certainly face will be the increase of the competitors’ list. But again, make sure the newcomers can be your competitors according to the previous paragraphs😎
7. Everybody needs a solution
Create not a product or services, create value and solution. Though I don’t want to sound like millions of other business coaches, still let’s not forget that people are not looking for a detergent, they are looking for the possibility to take the stains off the clothes, dishes, home surfaces. So, bear it in your mind on each and every step of production and promotion. Think about how much your potential competitors pay attention to that issue. Do they sell products or offer values and solutions?
In the paragraphs above, we have just analyzed some standard issues for every market. But I am sure that your own product and the industry you represent hide many more details you still have to explore to grow a successful business. But remember that in means of competitors you don’t have to fight against any of them, it’s a wrong strategy. You have to fight for the attention, awareness, and loyalty of your audience. Focus on your audience, predict the result of each step you are going to take, and don’t limit yourself to the existing local, country, or even global market. The audience often tends to drift from one market to another. So be ready, at least in theory, to shift to other markets. That’s why it’s certainly important to focus on your potential competitors. But make sure you have defined them correctly. If a company has a similar product to yours, operates and has got a share in your target market, and offers the prices similar to yours, it’s not always the key competitor. Focus on quality, value proposition, the reason to believe, and the switching costs of your target audience. If the existing market is on the edge of vanishing, and only the absence of valuable product options keeps the audience in it, be honest, provide value and quality, and in the long term, you’ll create your own market which will cover the needs of the consumers, and establish the new standards in the industry. Once again, don’t fight against, fight for.
Wish you good luck and long-lasting success in business!
Lots of love,