'There is a misconception that survival of the fittest means survival of the most aggressive…it’s whatever leads to reproductive success.’ - Stephen Pinker.
You only need to look at elite sport to see how feisty competition can turn sour. To be successful you have to find your own space in the market and avoid getting sucked into a damaging tit-for-tat battle.
Rather than competing directly you should learn from your competitors and use their strengths and weaknesses to help you. Here are some useful market research methods:
- Develop and improve your product or service
- Trigger the process of self-evaluation and refactoring
- Find and define your purple cow.
As that famous business sage the Dalai Lama put it, ‘your enemy can be your best teacher’; they can tell you where you must go to find your niche space in the market.
Learn from your competitors
'The wise learn many things from their enemies.' - Aristophanes
As Jason Fried, cofounder of Basecamp, says ‘learning from failure is overrated’, but that doesn't mean you can't learn from the failures of others.
Car manufacturers tear apart their rival’s cars to see what they have done badly or inefficiently so that they can learn at their rivals’ expense. You don't want to bogged down in feature-for-feature competition, but it can tell you what you do differently or better.
Audi launched their luxury segment car range in India to rival Mercedes. It realised that even though it was an elite demographic, buyers still cared about costs: a reality that Mercedes hadn’t understood. Through celebrity association and innovative pricing with a stripped back range Audi surged ahead of Mercedes.
This doesn't just apply to physical products. Look at what approach your competitors take to marketing: what can you learn from that? Are they doing anything that you should be doing?
What about their website? Is it easier to navigate, simpler to understand or even just more professional and attractive for a consumer?
If you can see what they are doing well and what they are doing badly without becoming a copy-cat company, you can make progress faster and cheaper than reinventing the wheel yourself.
Competitor analysis and market research methods are key steps that you can take in looking at ways to develop your own business. Be careful and shrewd, but do it properly and it can be an invaluable business strategy.
The dangers of dog-eat-dog
'If any of my competitors were drowning, I’d stick a hose in their mouth and turn on the water.' - Roy Kroc
The big problem with an aggressive competitive business model - besides the questionable ethics - is that it can prompt rash or hasty decisions.
The desperation to get one over your rival can make you rush your product and/or content to gain a temporary advantage, even if it’s simply a matter of PR one-upmanship.
The knock-on consequences hurt businesses as they fall into pitfalls such as:
- Overcomplicating the product to produce a fancy spec list.
- Concentrating on external gloss rather than internal solidity: style over substance.
- A product designed merely to better the competition rather than one that’s better for the customer.
- Refusing to pivot and be agile in your development, or (perhaps worse) overreacting to competition and pivoting too soon.
- Trying to please every single customer – remember the problem with trying to please everybody is that you please nobody.
To extend Roy Kroc’s metaphor, you become so preoccupied with trying to drown your rival that you lose sight of the shore and drown with him.
While you can learn from your competitors, you mustn't let them become a focus when developing your own business. Michael E Porter’s ‘five forces analysis’ says that any business with the following pushing against it will be hard-pressed to make economic headway:
- Threat of new entrants.
- Threat of substitute products.
- Bargaining power of buyers.
- Bargaining power of suppliers.
- Intensity of competitive rivalry.
These pressure emerge when you rely too heavily on pipping your competition to the post: a strategy that's bound to fail in the long run.
Focusing too much on competing with (rather than learning from) your competition can also lead to an over-reliance on customer feedback.
As Clayton Christensen argues in ‘The Innovators Dilemma’, you have to anticipate future or unstated needs to succeed. That means taking customer feedback on board, but not reacting to every comment and request in the hope that you'll outdo your competitors on that single sale.
Basecamp, for example, a software company with an innovative approach to business, prides itself on its ability to say ‘no’ customers, which has in turn created an incredibly strong brand and an even stronger product that remains relevant.
Search for the hero inside yourself
'If you know your enemies and know yourself, you will not be imperilled in a hundred battles.' - Sun Tzu
The Chinese war strategist believed that success in battle requires that you know yourself as well as you know your enemy. You have to understand your own strengths, as well as your competitors', if you are to succeed.
Focusing on your business and its strengths breeds innovation, self-evaluation and credibility. It also helps you find your purple cow - the one thing that makes your business unique to the customers who love you.
Louboutin uses its famous stiletto design across all its branding: it knows it's the company's defining strength. It even uses it to brand its nail polish: the brush handle is a massive spike, mimicking the Ballerina Ultima (the highest heel Christian Louboutin ever designed at a gravity-defying eight inches).
Louboutin didn't try to copy its competition in a new market - instead it focused on what it does best and ended up developing an incredibly striking container in a crowded market.
Create space with inbound marketing
'That’s what I do: look for spaces. All day…lift your head up, move, see, think.' - Xavi Hernandez
Many companies still rely on traditional marketing and advertising techniques but their efficacy is waning as customers get better at spam filtering, ignoring junk mail, fast-forwarding through TV commercials and ad-blocking website advertising.
Inbound marketing, however, creates a space where your business can be itself and allows people to come to you. The idea behind inbound is to prioritise the needs of the customer over corporate bluster and definitely over out-shouting the competition.
This tailored approach of inbound will strengthen your brand and help you refine and promote your own purple cow in the process. You can learn from your competitors in how they achieve this, but don't let them define who you are or how you present yourself.
Authenticity is the chief building block for developing customer loyalty. Be true to yourself rather than trying to copy the competition and you'll acquire more than customers: you'll find life-long fans.