How much does your competition weigh in on your decisions? Your closest competitors may not be giving you feedback on your packaging or commenting on your blog to add additional insights, but they are playing into your strategic decisions whether you realize or not.
How could your competition not be considered? How could you ignore pricing, product design and delivery or other key elements without knowing how your target market is already solving the pain that you seek to alleviate? They may be doing so with a direct competitor or with some complementary good or with some innovation that they dreamed up on their own.
No strategy can be made independent of the enemy
There is a ton of media out there that supports the attitude that your competition is your enemy. We are taught that your competition is hostile and eager to meet you on the bloody market battlefield. There are plenty of examples where this plays out. Leading cola manufacturers have been battling it out for longer than I've been in existence. We've seen these the leading two brands go head to head in the streets and in vending machines across the country. There have been taste bud smack downs in the form of blind taste tests for as long as I can remember.
The strategies of these two leading brands must be closely tied together. Soda maker A can't do a nationwide promotion for the 4th of July on a 2 liter without the expectation that soda maker B will as well. Sponsorships of major events and Super Bowl advertising are likely in lock step.
The one thing that stands out to me though, is that they have been battling it out … for decades. They have endured alongside of each other and have created cult followings that few other brands can rival. They have remained at the top of the soda leader board co-existing as frenemies within the space.
While not every brand in every competitive space will fit nicely into this mold, I do think that considering your competition as frenemies is a better way to view the competitive landscape.
The bright side of competition
If you're lucky enough not to have any competition then, hazah! You're bathing in the beautiful Blue Ocean of strategy. If you're in the Red Ocean, well, hey there's still money to be made, you just may have to be a bit more scrappy about it.
There is an upside of having competition:
You have others who are educating your market, unlike completely new ideas or products where consumers may have to go through extensive research to "get" what your service or product is all about.
Your competition is targeting your market and communicating with that market with traditional or new media. This communication is great marketing research for you because now you know what messages and keywords to explore.
You have a baseline for pricing and product features that you can use to ask your target market their thoughts on the value they perceive they're getting.
It all comes down to preference
The thing that makes competition healthy is that it drives companies to define why they are different. You can't be all things to all people. Knowing that there are others who serve the market with variations on product features, service levels, price points, etc. means that you don't have to.
Your frenemies are doing you a great service by serving customers that would otherwise not fit within your service model or demand things that you can't or don't want to deliver on. If you're a sit down Italian restaurant, you're not going to hire a driver just because 1 or 2 customers want pizza delivered to their home. Okay, maybe that's a stretch but you get the idea.
When you target and segment your market, you're identifying those customers that you can deliver the kind of value that they want in a way that you can profitably deliver. All others customers may be better served by the frenemy down the street.
By no means am I advocating that you take your eyes off the competitive landscape and put the competitive analysis on auto pilot. Actually, I'm supporting the opposite. I say, eagerly consumer your competitions media, stealthy purchase products and understand their after sales support. Know your frenemy and you'll be better equipped to define your differentiation.
By Marciela Ross
Source by Marciela Ross