While it may seem obvious that competition poses a threat to the success of your business many organizations fail to effectively track their competition within the marketplace.
This is important for a number of reasons - one (the obvious one) they take possible revenue and secondly they often provide innovations within your marketplace, they expand opportunities and they influence your customers. By doing this competitors constantly force your organization to develop strategies and satisfy customers.
Who are your competitors?
Identifying your competitors can be more complicated than you initially think and needs to be tackled in a number of ways. By understanding how your customers make their buying decisions, your competitors are often exposed, once you know their there you’ll need to asses their capabilities and their place in the market. Once you’ve identified them, you’ll probably want to nominate someone in your organization to gather information and track their activities.
What is the future?
It’s not just your existing competition that you’ll need to keep your eye on - you’ll also need to keep an eye out future competitors. Tracking these can be arduous - where are they - how do you find them? Future competition can come from a number of places:
Market Expansion - Existing companies expanding into your market area
Product Expansion - Existing businesses that expand their poduct offering
Business Change- Changes to existing enterprises (funding, distribution etc) could make a small competitor a major competitor
What should you track?
One of the first things that you should consider tracking is the capabilities of your competitors for example possible capabilities include -their customer base, marketing and distribution activities.
The second element that you should track is the organizations strategy. For example - How do they price their products, what markets are they targeting, how are their product(s) developing?
Understanding your competitors targets regarding market share, revenue targets etc will also be beneficial.
How should you gather information
Luckily these days information is widely available on business activity. Places where you can gather information includes, Trade Shows, Stock Market information, Suppliers, Corporate collateral (e.g. website). Make sure that you business has a central system to store this information and that it is appropriately managed and co-ordinated.
Now your tracking your competition, how you act on the information may have multiple facets - it depends largely on your organizations strategy and the market place you want to operate in. Tracking your competition however will provide the right steer in developing your organization strategy and targets.
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