Learning From the Competition
Competition plays an important role in the organizational performance curve. It has been a principal tool used by leaders to build strong industry and economic cultures which can deter monopolized systems that hinder innovation. This is because it stimulates the emergence of disruptive technologies that improve overall productivity and creates new markets.
In business, learning from the competition is essential for developing strategies for entering and succeeding in markets. It provides relevant insights that can optimize implementation plans and resource management strategies; however, the process of learning from the competition has to be intentional. The process should be done to learn about new/better processes to meet or exceed customer expectations, not to minimize the work put into building your business.
So, how can you learn from your competition? This article outlines how to strategically learn from your competition while keeping the novelty of a business intact, and the process starts with:
- Highlighting the building blocks of your business
Every entrepreneur has to go through the process of turning their business idea into a business plan. It enables them to understand their target audience and develop unique ways to efficiently provide key benefits to them profitably. Before learning from the competition, it’s preferable to have an overview of your business before diving in.
Tools like the Business Model Canvas help entrepreneurs differentiate themselves from their competition, it helps to clearly identify value propositions, customer segments, and key activities, among other elements. Highlighting these building blocks of the business is a vital first step to identifying key impressions from your competition.
2. Understanding who your competitors are
With a better understanding of the building blocks of your business, the next step is to identify your key competitors. Figuring this part out can be a little difficult especially if the industry your business is in has a sparse distribution of companies, or a majority of other entrepreneurs have not built a presence for themselves online but, being able to highlight those you can identify as peers based on company size, estimated market size, or number of active years would help in ensuring your business is compared with the right companies.
This isn’t to say that there isn’t room for learning from companies who aren’t peers. However, Peer-Peer comparison helps to ensure that the process improvements you want to make can be done with the resources available to you. The information obtained from observing non-peer companies can help set targets for future developments and ensure avoidable industry mistakes aren’t made.
A few ways to source for peer companies are with online searches, social media searches (LinkedIn, Instagram, Twitter), industry-specific events etc.
3. Outline the information you are searching for
Going back to understanding the building blocks of your business, learning from the competition is about understanding the key elements of their business model i.e. their value propositions, customer segments, customer relationships, channels, key activities, key partnerships, key resources, operation costs and revenue generation ideas.
Getting access to all of that information might not be possible but from observing their interactions online, physical stores, or how customers react to their products and services, you can make educated deductions on what they could be.
Keep an eye out for what people are saying about their company: what they like, what they hate and what they would like to see. Understand what their customer’s user journeys are and what pain points are being neglected. Going through review platforms and social media comment sections can give the information needed concerning this. If you can, interact with business owners and leaders who are open about sharing their industry experiences with other business professionals.
4. Collate the data extracted and convert it to digestible formats
Making sense of all the information gathered is one of the most important steps to this process. At this point, highlighting the trends/patterns observed indicates how well the extracted data can be included in new strategies.
Factual statements concerning existing markets, convertible market sizes, pricing, branding, value offerings, internal processes, and potential partners can be deduced, presented in graphs, charts or maps where required and included in growth or marketing strategies.
Companies like Hootsuite and Oktopost help with comparing social media strategies in terms of sharing, click-through rates, and total views.
5. Adjust your strategies accordingly
Once the extracted data is in digestible formats, you need to update your growth and marketing strategies. The point of this is to build on the experience of competitors to get as much advantage as possible in the market.
With a constant cycle of competition, the rush for finite consumer resources will ensure that companies put in the work to improve customer experience and consequently increase the (internal and external) value of their business.
- The Importance of Competition for the American Economy | CEA | The White House
- How to Learn from Your Competitors to Grow Your Business
- Lessons You Can Learn From Your Competitors
- Learn from competitors if you want to improve
- Learning From Your Competitors Mistakes and Successes
- News — 10 Ways Competitions Enhance Learning