To most entrepreneurs and small business owners, the word ‘competition’ is a dreaded one. For them, it’s a word that brings out visions of a stolen market share, price wars, and copied ideas. What most of these entrepreneurs don’t acknowledge is that competition is inevitable. One may be a leader in their market, but somehow they also run the risk of being shadowed by others who are focusing on the same consumer needs or have developed similar capabilities. Let’s try to explore how healthy competition might help you grow your business.
We have seen companies crippling due to fierce competition, and companies that can innovate and adapt constantly without an external force, are a rarity. That’s a gap that competition closes, as it leaves no room for complacency throughout the organization, keeps you on your toes, and helps in refreshing your strategy.
It compels you to anticipate changes and trends in your industry and leads to proactive change. Successful business owners have always been known to redefine their offerings and processes in the face of competition. A few options of dealing with your competition follow:-
Collaborate with Competition
Are you at least touching base with your competitors for keeping your company abreast of current industry trends and practices? Such insights can be very beneficial especially in times of economic slowdowns.
Is it feasible to come together and put complementary capabilities to use by addressing unique market needs?
Not all players in the industry offer the exactly same range of products. You may consider cross-selling to each other’s customers to get more revenue out of them and allow mutual growth to occur.
Conversions are easier since the customer is already paying for the product. You can choose between 2 setups – one in which you receive a share in profits per referral or the other one where you both crosses sell each other’s products.
Grow the Entire Market Together
As industry dynamics change, it helps to come together with the competition to achieve scale in things that affect your market. Let’s say yours is a concept-based product requiring special efforts in promotion and consumer education, it’ll help to co-promote the idea of the entire industry and will lead to reduced promotion costs due to scale.
Keith Goodwin of Cisco says that they “embrace healthy competition with companies such as Avaya, HP, Huawei and Juniper Networks.” He further adds – “Each of our competitors brings its strengths, innovations, and programs to address a variety of customer and partner needs.”
Although we may argue that working with your competitors is a double-edged sword having more upside than downside, it helps to remind yourself that when you are dealing with competition, you are treading a very thin line. You shouldn’t reveal all your cards to the competition and also be cautious that competitors do not influence the direction that you want your business to take. Finally, ensure that you don’t end up being a following rather than leading.