Business is war and the competition is the enemy—right? Wrong. Though competition is a fundamental aspect of being in business, savvy entrepreneurs know that viewing competitors exclusively as adversaries is not only shortsighted, it’s potentially damaging. A better strategy is to build alliances with your competitors and let them help you become better and stronger. Here’s how:
1. Know who your competitors are. This sounds basic—so basic that it’s often overlooked by many business owners and salespeople. If you have a retail store, your competitors are obviously other retailers who sell similar merchandise, both brick-and-mortar and online. But that’s not all. Less visible competitors are the businesses that are meeting the needs of your customers with products and services that you don’t offer and haven’t thought about, or that might even make your products unnecessary and obsolete. You need to know who your competitors are—not just the obvious ones, but the ones that are flying under the radar.
2. Find out everything you can about the competition. Don’t allow yourself to be blindsided by anything your competitors do. Pay attention so you see it coming. Set up intelligence files on each competitor. Look for articles about them in trade journals, newspapers, and magazines. Study their websites. Use programs like Google Alerts to track what’s being said about them online. If possible and practical, “secret shop” them regularly to observe their operations firsthand.
3. Develop relationships with your competitors. Once you’ve identified your competitors, reach out to them. Join industry and business networking associations so you can get to know the people who own and work for competing companies as individuals. You never know where those relationships might lead.
4. Be prepared to cooperate and collaborate when necessary. If something is going to have a strongly positive or negative impact on your industry group or community, reach out to your competitors so you can join together with appropriate action. For example, you may want to speak with one voice on pending legislation that could help or harm your companies. Depending on your particular business, you may find that competitors can also serve each other by functioning as backup resources. For example, you may get an order that is too big for you to handle alone. If you have good relationships in place, you may be able to outsource part of the work to a competitor. Or if a competitor suffers a disaster of some sort, whether natural or manmade, that prevents them from serving their customers, you can step up and help out. That’s just good business, but more important, it’s the right thing to do.
5. Let your competitors make you better. When a competitor is beating you, do the best you can to figure out why—but don’t use that as an excuse to accept defeat. Once you understand what they’re doing that the market prefers, take a look at what you could change that would make you even more attractive. Don’t automatically copy everything your competitors do; take their best ideas, test them for true effectiveness, and improve on them.
6. Resist the urge to compete on price. Especially in today’s challenging economy, it’s tempting to cut prices to gain market share, but it’s a strategy that doesn’t work in the long run. Instead, focus on providing greater value.
7. Be prepared for the competition to play dirty. Fair competition is great because it forces everyone to operate at their best, but you will have competitors who don’t play fair. There are always people who think that the best way to build their own companies up is by tearing others down or by cheating in some way. When that happens, consider the situation and take fitting action. Don’t delay legal action if it’s appropriate. One of the most common places for competitive dirty tricks is the internet. Monitor what’s being said about you online and have a proactive online reputation management plan in place in case you become the target of an internet attack.
Competition is a natural part of being in business in a capitalist economy. There will always be someone who wants a bigger piece of the pie and you must always be vigilant if you are to maintain and grow your market share, so let that work to your advantage. Your best competitive tactic comes from Sun Tzu, a Chinese general and military strategist from about 400 B.C., who said, “Keep your friends close and your enemies closer.” And if in the process you happen to turn an enemy into a friend, all the better.
By JK Harris
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