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Competitive Analysis Helps Your Business

Competition can actually drive your business to be better.

It’s long been said that competition in business is a buyer’s best friend.

When two or more businesses compete for the same customer, the result can be that consumers benefit in the form of a better price, product or service.

While it is true that buyers often prosper from competition among businesses, a deeper look reveals that competition—and competitive analysis—can become a seller’s best friend, too. Sound crazy? It’s all in your perspective, determining how you’ll greet competition in the marketplace.

You needn’t roll up your sleeves and ball up your fists, thinking you need to confront your competitors. Instead, take advantage of how their presence drives you to do more

You needn’t roll up your sleeves and ball up your fists, thinking you need to confront your competitors. Instead, take advantage of how their presence in the marketplace drives you to do more—or less—in a way that improves your business mission and methods.

It’s not always about the customer

Sure, without customers, there’s little reason to bother since there wouldn’t be revenue to establish, grow and improve a business.

A business, however, cannot be singularly focused on customers. The likely motivation for starting a venture begins with a personal passion, or the discovery of an unmet need or unnoticed opportunity. Often these are the motivations of individuals who strive to accomplish something or fill gaps that can improve lifestyles.

While the point of taking on such problems or seizing opportunities is to serve an audience or customer segment, there’s also a large portion of the motivation that is within the business owner or entrepreneur.

Her goal is to make her vision a reality, perhaps to develop better business methods, or enable others to follow and succeed in her footsteps. In that regard, the desire to succeed in business isn’t always 100 percent centered on the customer, and that’s OK.

A fresh perspective on competition

Too often, we think business competitors need to be flushed out, confronted and soundly defeated. In the old days of the take-no-prisoners market domination, businesses would seek to undercut and undermine their opponents.

When a business looks upon its competitors as motivators to discover new and better ways to do business, the market benefits as much as the business owner

The goal was to steal away customers and secure a veritable monopoly over a market segment, leaving those who would dare to compete with you to wither away. And if this scenario were to play out fully and perpetually, the victor would emerge unchallenged and, therefore, likely to grow and improve going forward.

The power of competition—and competitive analysis—comes from what it does to a business that strives to do more, and do it better.

The measure of that success, however, is not in comparison to another business, but in regards to a business owner’s original vision and capabilities.

When a business looks upon its competitors as motivators to discover new and better ways to do business, the market benefits as much as the business owner. With that, it would appear more beneficial to understand competitors but not necessarily chase them to defeat them; that would leave a business as merely responding to a competitor’s moves.

Instead, a business stands to reap more results when it defines and executes to its own vision, keeping an eye upon and learning from what others in the same market space might be doing.

But your customers do want competition

Today, consumerism is about comparison. Compare product X to product Y and purchase the one that seems best. Equally, compare business A to business B and see which does the better job of presenting products X or Y for sale. Purchase based upon the business’ prices, service and reputation.

The overriding goal should be to define and present to customers the best experience possible regardless of how that compares to any competitor

Naturally, to win the sale seems like the motivation to take on the competition in your competitive analysis. The greater gain, however, comes when a business—perhaps yours—invests in itself as intended rather than attempt to redefine itself based solely upon competition.

It’s wise, and well advised, that a business make adjustments based up what competitors are doing, but the overriding goal should be to define and present to customers the best experience possible regardless of how that compares to any competitor.

The business that succeeds is usually that which draws in customers and converts purchases based on its own merits and, again, vision.

If this seems to suggest that competition is best disregarded entirely, the truth is that seeing how the competition is working is helpful—and necessary—to inspire a business owner to do even better to fulfill his or her goals, while striving to satisfy customers in new ways each day. But, more importantly, a business needs to assess itself continually to decide if it’s following its own path or merely trying to imitate a competitor.

About the author

Dennis L. Prince
Dennis L. Prince has been analyzing and advocating the e-commerce sector since 1996. He has published more than 12 books on the subject, including How to Sell Anything on eBay...and Make a Fortune, second edition (McGraw-Hill, 2006) and How to Make Money with MySpace (McGraw-Hill, 2008). His insight is actively sought within online, magazine, television and radio venues. Opinions expressed here may not be shared by The Online Seller and/or its principals.



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