Elements of Success: Step 4: Who is Your Competition?

“Your most dangerous competitors are those that are most like you.” Those to-the-point words from Bruce Henderson serve as a reminder that smart business people learn who their competitors are and find out as much as they can about them.

Identify Your Two Types of Competitors

Most businesses deal with two types of competition:
1. Direct competitors: These are companies that offer the same products or services, or they offer ones that are quite similar to yours.
2. Indirect competitors: These businesses offer a different product or service, but they still fill the same needs.
Learn more about these two types of competition in the video “Assessing Business Competitors.”

Do thorough research to compile a list of both direct and indirect competitors. Doing a Google search and scouring the Yellow Pages are good places to start. Entrepreneur magazine suggests asking yourself, “If people didn’t frequent your store, where would they go instead?”

Learn About Your Competition Through Networking

After identifying your competitors, learn all you can about their business models, and stay apprised of what they are doing. Don’t just copy their approach, though. One of the best reasons to pay attention to your competition is so you can differentiate yourselves from the pack.

Networking is one of the strongest tools in your competition-monitoring arsenal. Some valuable resources for networking are:

• Social Media: Follow your competition’s Facebook, Twitter, and other social media accounts. Some companies post frequently about current specials and services.
• Clients: Get to know your clients, so they’ll be comfortable chatting with you about their business habits and their experiences with your competition.
• Suppliers: Savvy questions asked of your suppliers can help you learn what other organizations in your line of work might be ordering.
• Industry trade shows, conferences, and meetings: Participating in these programs helps you build connections in the field and exposes you to what is going on in like businesses. You can learn about up-and-coming ideas that your competition may be adopting.
• New employees: Hiring someone who used to work for the competition may prove to be a valuable source of information about how things are done at the other company.

The more you know about how your competition does business, the more successful you can be at creating a strategic plan that will lead you to the top of your field.

Stay tuned for the next installment in our 10 Elements of Success series when we will talk about Who Are Your Customers or Clients?

For the previous installment in the series please see Getting The Help You Need.