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Keeping An Eye On The Competition

by fatweb

Kevin-Vincent (1)

Kevin Vincent is a director of business improvement consultants Vincent and Nugent Limited – www.vincentnugent.co.nz

Increased competition is a reality and driven by many factors, including the emergence of a global marketplace, the increased number of companies and new technology that makes it easier for them to enter new markets. 

Competition is great. It drives you to continually improve. It drives the quest for and the development of establishing a sustainable competitive advantage which is achieved through differentiation and unique selling propositions.

You can ignore your competition and lose, copy them and be a follower, or lead them and become a winner. Winners are always more successful. Take an offensive position not a defensive one and devote time to continual improvement. 

The process should start with a general assessment of their product positioning, how it compares with yours on price and quality and its relative market share. Secondly ascertain their strengths and weaknesses and likely next moves. 

The next step is to counter these initiatives or deficiencies with your own strategy. 

Competitor analysis will assist you to understand your competitive advantages and disadvantages relative to competitors. It will give you a greater understanding of the competitors’ past, present, and most importantly, future strategies. It will assist strategies to achieve competitive advantage in the future and it will help forecast the returns that may be made from future investments.

The following questions should be considered:

• Who are your competitors? 

• What threats do they pose?

• What are the objectives of your competitors?

• What strategies are your competitors pursuing and how successful are these?

• What are the strengths and weaknesses of your competitors?

• How are your competitors likely to respond to any changes to the way you do business? 

Areas of strength

Capabilities? 

Competitive advantages? 

USP’s (unique selling points)? 

Resources, assets, people? 

Experience, knowledge, data? 

Financial reserves, likely returns? 

Innovative aspects? 

Price, value, quality? 

Accreditations etc? 

Management?

Areas of Weakness

Lack of competitive strength? 

Reputation, presence and reach? 

Own known vulnerabilities? 

Timescales, deadlines and pressures? 

Cashflow, start-up cash-drain? 

Continuity, supply chain robustness? 

Morale, commitment, leadership? 

Accreditations, etc? 

Management?

Areas for opportunity

Market developments? 

Competitors’ vulnerabilities? 

Industry or lifestyle trends? 

Technology development and innovation? 

Global influences? 

New/niche markets? 

Tactics: eg, surprise, major contracts? 

Business and product development? 

Partnerships, agencies, distribution? 

Potential threats

Political effects? 

span class=”s1″>Legislative effects?

Environmental effects? 

Competitor intentions – various? 

Market demand? 

New technologies, services, ideas? 

Vital contracts and partners? 

Loss of key staff? 

Sustainable financial backing? 

Economy – home, abroad? 

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