Business Models 101: Competition

In this part we will discuss your Competition and how important it is to know your competitor but without focusing on them too much.

I have to repeat it on every page but starting something on your own, creating value for you, your family and the world is a totally recommendable thing to do. You want to create your company. This is GREAT. The world has been made by people like you. Entrepreneurs. Self-Made Men, Creators, Builders people that believed an obstacle is just another great challenge to overcome, to solve and put behind them as an achievement. 

Competition

Having a list of competitor with as much details as possible about them is important.
But even more important is to know what differentiates them from you. Where are their strengths, weaknesses.

Are there opportunities that I can create from their weaknesses. Can they use some of my weaknesses to create opportunities form them?

This is called a SWOT analyses. Strengths-Weaknesses-Opportunities-Threats.

 Be careful also not to focus too much on your competition, it takes a lot of energy and the best is to use this energy to focus on your business.

There was a tendency in the SWOT analysis to try to focus and improve your weaknesses in order to be good everywhere.....but this has changed in time.... It is like me focusing on my bad grammar and spending hundreds of hours studying this instead of focusing on my strengths (Cupcake making).... who cares if I spell Vanilla or Wanila cupcake (:-) as long as it takes your breath away when you eat it. 

competition business model

In my cupcake factory, I know I have the big shops or chains that are producing cheap and unsavory cupcakes full of sugar and unhealthy stuff.... so these you have to observe and sometime even try their cupcakes.  Then you have the famous big competitor that is targeting the same market as you. Again try to understand who his customers are, are his cupcakes different from yours, how different, how can you makes things better, reach more people, etc....and also is there enough room for him and me on the market. If yes, then no worries, you could even go and talk to him to share ideas how to increase your common market.....make him a partner....

Knowing your competition is important but you should not focus on them. Another example: it is like driving on a small road in the night and another car comes from the other direction. If you focus on the other cars' lights then you are doomed to crash into it but if you focus on the road then all will be fine.
So know your competition, know what they are doing, know where they are successful, what are their strengths and weaknesses and from this concentrate on what you are good at and on developing your customer base.
You customer might ask you about your competitor or even you would have to quote the same customer as your competitor. But your energy should be spent on developing your company not fighting your competitor.

Here are the main questions you have to ask yourself about your competition.

  • Who are our competitors?
  • ow are they ranked??
  • owwis the market developing (growing, stagnating, diminishing)??
  • ow do we differentiate from ourr competitorsH
  • owwbig, how strong are our competitors??
  • How are they seen from our common customers?

 

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