All businesses can learn from their competitors and it is important for long-term success to have an understanding of what they are up to. This of course, does not mean colluding with them which is illegal and immoral.
We may have had great success in the past operating our business a certain way, be it the goods or services we sell or how things are run behind the scenes. Just because something has worked well in the past doesn’t mean, the market isn’t changing and/or what your customers are wanting isn’t evolving.
Take Nokia for example. Prior to Apple’s introduction of the I-Phone, Nokia was the dominant mobile phone manufacturer in the world. Sure there were other players in the market, just as there are today, but Nokia was top of the tree.
One of the interesting aspects of the first I-Phone was how it built upon the ideas of Blackberry that a mobile phone has the potential to be much more than just a phone with email and other business apps designed to make things easier.
History shows us that Nokia was simply left behind and while Blackberry was on the right track, their products haven’t been able to have the same impact as the I-Phone. Samsung by contrast, really wasn’t a player in the mobile phone market until more recent years and have done so by understanding what aspects of the I-Phone consumers like and putting their own spin on it.
Remember Kodak? They were the worldwide standout of film production and image processing for many years and yet the company no longer exists? How does this happen? Quite simply, while other companies focused on how to capture and improve images digitally, Kodak didn’t believe it was possible for traditional film to simply cease to be relevant.
Understanding what your competitors are doing is useful for reasons including
- What customers are looking for now and what will they want in the future?
- How to differentiate your goods and services from theirs
- What are they doing that you can do better?
- What do you do better than them?
- How to price your goods and services in your target market
- Are there ways to operate your business more efficiently?
How well do you understand your competition?