Unless we have a monopoly, an important component in developing our strategy is understanding the competition. After all, how they go to market affects our place in the market.
One approach is to concentrate on their strategy. What can we glean about their strategy from the way they operate? Does their marketing give us insights into their focus areas? What other sources do we have to uncover their strategy? News releases from CEOs and shareholder/year-end reports might offer valuable information. Even former employees, especially disgruntled ones, may be willing to share insights.
It can be helpful to challenge your sales force, service team, and delivery staff to be alert for indications of what competitors are doing or planning. Anyone who interacts with clients might hear and see evidence that is advantageous. As this can cut both ways, counsel your own staff to be careful about what they share with the competition.
Another important source of information about what clients want – and may be getting elsewhere – is Voice of Customer (VOC) enquiry. This can take many forms including direct surveys of clients, hiring services with VOC expertise, or secret shopper campaigns.
However, too much focus on collecting competitive intelligence rather than boldly carving your own path is fraught with its own risks. Be mindful of what is going on in the market but listen to what your own data is telling you. A competitor who might be further along the learning curve has an advantage that you may not erase by simply getting in line behind them. Without differentiation or a disruptive strategy, chasing them may be a waste of resources as you are unlikely to pick up an adequate share unless the market is expanding at a rate that ensures any new entrant can succeed.
The end goal is to be superior in whatever way you’ve deemed important to your client segment. Walmart is a great example with its “everyday low prices” strategy. You can be sure they scour the market to ensure their prices are low, but more important, they are heavily focused on operational efficiency and their ruthless vendor negotiating strategies are legendary.
But recently, Walmart has learned that the status quo is not enough. In an incredibly competitive space, faced with the industry disrupting Amazon, they are balancing their low-price bricks-and-mortar strategy with the price/convenience mix of online shopping. Amazon has responded to the bricks-and-mortar competitors by purchasing Whole Foods. Both companies have blended what they are good at with what their competitors do well in an attempt to respond to what clients want.
Competition is good for the marketplace and for consumers; but it’s good for our own organizations too. Competition keeps us from becoming complacent. Whether it’s in the form of similar offerings or disruptive technology, keeping an eye on competitive trends will ensure our offerings don’t go the way of the buggy whip.