“Survival of the fittest”, this theory given by Charles Darwin, stands true not just for species but even in Business. It is a fight for the largest grab of the market share, the fight to survive and outgrow unless you wait and do nothing and be swallowed by the competition. Enough of scaring you.. let me start from the basics, to give you a backdrop of why we are even discussing this topic and why should you know your competition.
In our article about important Questions to ask before you startup , two of the question were:
- how different your product is from what is available in the market
- identifying who your competition is
Some of us might think that it is a secondary aspect and our prime focus should be on our own product. Yes, the prime focus is your own product, but how do you make sure that the product you are creating has customers, customers not in your mind, but customers who will actually choose you over another company selling the similar product. You have to know what other people in your game are doing, do do it in a better and smarter way and gain traction and the market share.
Coming to the very often used and misinterpreted term “Market”, before reading ahead ask yourself what does market mean to you? Market is more than often confused or restricted to customers, but by doing that you are missing out on two very important aspects – the Competition and the Suppliers. market is a combination of these three broad factors, mathematically Market= Customers+Competitors+Suppliers.
Competitive analysis should be an integral part of your Business plan, even more so when you are a startup . This makes your aware of the landscape you are operating in . Do your own and your competitors SWOT (Strength, Weakness, Opportunity and Threat) analysis. In your business plan, record who they are, what they are doing, what their future plans are, how you have planned for marketing and selling against your competitors? If not, then you’re losing out. Competition is a remarkable driving force, it makes you move forward in the right direction.
And don’t ignore this by saying that your idea is unique and you don’t have competition, you have competition even when you are looking at the same customer base as the other company. Even if your startup is a brand new idea and is gaining traction then in no time you will see companies mushrooming up as your competition. If you still feel, you will have no competition, then you are doing something wrong, something that is not going to engage customers.
For this, know Who is your competition: Is it startups , it is a big player , is it a company producing substitute goods. If it a startup you should be happy and stay on top of their moves, too many startups in the same field indicate something good happening “Market”. If it is really big player and established one, with loads of capital and links and market share, like if you want to compete on search products with Google, you might want to give it another thought !!
Second step is to gather as much information about them as possible.
- Talk to the customers, take their feedback on why they would choose one competitor over the other.
- Study your competitors website
- Buy from your customers
- Read the press releases and presentations of your competitors
- Subscribe to their new letters, blogs and social media pages
- How are they selling their product, what do their ads say, how are they marketing their product.
- Use Google Keyword search to know how many competitors you have
- If it an already established publicly traded company, there will be a lot of information available for them due to laws for publicly traded companies
Having said all that don’t be obsessed about your competition as well, focus on your actions but make sure those actions are coming from a good research and analysis of your competition!