Beating the
competition
Most
business-owners know that they
should do competitive analysis, but
often they do not know exactly what
to do, when to do it, and how to do
it with the most value and least
cost.
Competitive
analysis is more effective when it
is really focused – and in such a
way that leads directly and quickly
to real business improvement. You
can do this by ‘benchmarking’ your
business against competitors.
Why benchmark?
Without some
benchmarking you can easily get
overtaken by other competitors, or
by new forms of competition. You can
also become complacent, take
customers for granted and become
sluggish and reactive, rather than
proactive.
Indeed, this can
happen even at the highest level of
business. For example, the board of
Marks and Spencer has been accused
of failing to respond to changes in
the marketplace, when retailers such
as Next and Gap, and even
supermarkets such as Tesco and Asda,
began to significantly erode Marks &
Spencer’s market share in the late
1990s.
Benchmarking
should be an ongoing process, and
not just an afterthought as part of
annual business planning exercises.
Every day could present
opportunities to learn from your
competitors and improve your
business performance.
Who should you
benchmark against?
What should you
benchmark?
You should
benchmark areas where we can take
advantage of your strengths, or
conversely, areas where you are most
vulnerable. You can analyse aspects
of your business by breaking it down
into areas such as:
- product range,
quality and pricing
- targeted
markets
- image and
branding
- distribution
channels
- geographic area
- technology
- customer
service
As you will be
limited in the amount of resources
and attention that can be put into
new strategies to beat your
competitors, you may need to be very
selective. Perhaps you will
initially focus on only 20 per cent
of your business.
How do you do it?
One of the most
useful approaches is to use some
form of “Competitor Profiling”
technique. Using your chosen areas
for benchmarking, you can create a
table like the one below for each of
your competitors.
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Very strong
5 |
Strong
4 |
Average
3 |
Weak
2 |
Very Weak
1 |
Brand image |
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Product quality |
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Customer service |
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Innovation |
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Supporting systems |
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Cost base |
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Marketing |
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Information can
be gathered from a variety of
sources, including: customers,
suppliers, distributors, industry
commentators and staff joining your
organisation. You can also make
contact with competitors – perhaps
by acting anonymously as a customer
– and you can examine their job
advertisements, their annual
reports, and their visible
publicity, brochures and products.
Having compiled a
table for each competitor, the next
stage is to score your own business;
you will need to try to see some of
the criteria from the customers’
point of view. This will allow you
to see at a glance the comparative
areas of strength and weakness.
Interpreting the
results
The important
thing is to focus principally on
learnings and competitive insights
rather than primarily on
measurement. Try bringing together
key managers and staff members in
short “focus” sessions – perhaps
over a long working lunch. We can
help you with this stage, and with
other aspects, too.
Getting the
maximum value for your business
Benchmarking
should be an ongoing learning
process. Its principal value should
be as a spur to strategic and
innovative thinking, and to act as a
continual challenge to your business
culture and mind-set.
But competitor
analysis is especially important
when you are contemplating any new
business development. It can pay to
act out full role-plays, and to
“think as if I am a competitor”.
As chess players
know to their cost, if you spend all
of your time thinking about only
your own moves, you will almost
certainly lose.

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