Tag Archives: Competition

08.15.13
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Sun Tzu and “The Art of Small Business”

0548d8fGuest Author: Bryan Clayton

Bryan Clayton is a serial Entrepreneur and Co-founder of GreenPal

He helps consumers source lawncare providers via an online marketplace.

 

 

“So in war, the way is to avoid what is strong, and strike at what is weak.” ― Sun Tzu, The Art of War

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On the battlefield 2500 years ago Sun Tzu could not have ever known that his philosophies and teachings on warfare strategy would be immortal doctrines implemented into business strategy today.  His ancient text, The Art of War, has been highly regarded as a source of insightful strategic thinking for the Business world. But what do military generals and entrepreneurs have in common?  Are there parallels that can be drawn from military strategy and entrepreneurialism? Anyone who has ran a business knows the feeling that sometimes its outright war. Businesses by nature are competitive with each another. Sun Tzu’s thesis is to “win all without fighting,” or to win market share without heading into a bloody battle against your competitors.

Sizing up the competition

Sun Tzu says, “If you know the enemy and know yourself, you need not fear the result of a hundred battles.”

Sun Tzu advises us to intensely observe our competitors to identify what areas in the market place they are underserving, mainly with the intention to avoid a head on conflict, and a possible financial bloodbath.  By utilizing innovative technologies and consumer trends, he advises us to “know our competition’s weakness as well as our own, and more importantly, our strengths.” Ultimately, the discipline is to attack the opportunities in the marketplace underserved by competition, while not confronting your competition directly on their strengths.  

New Product Development

Sun Tzu says, “Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.”

Sun Tzu’s teachings educate entrepreneurs as to the practicality of lean product development methodology. In its essence lean product development is creating a minimal version of the product with basic, core features. Starting by test launching that product to gain early user feedback while improving it little by little throughout the user feedback cycle process. This conserves resources and aligns the team’s attention on the actual product itself. Once the product is improved time and time again to a version with features influenced by user feedback, then it will be perfected for a full scale launch.  This is a “win” before going to war.  Sun Tzu says, “Defeated warriors go to war first and then seek to win.”

Team Building

Sun Tzu Says, “Regard your soldiers as your children, and they will follow you into the deepest valleys; look upon them as your own beloved sons, and they will stand by you even unto death”

Without happy loyal team members, your startup or company will probably not achieve greatness.  Sun Tzu teaches us, as the leader of your team you must focus on growing yourself by serving your people; leadership is servitude.  If you care about them, they will care about the organization’s success.  A unified culture will be instrumental in success of your team’s success and will add real purpose to your company’s mission, and why it even exists.   While your competitors will be dealing with redundant issues such as employee turnover and quality control, effective and authentic leadership will enable you to focus on the strategic direction and the growth of your company. Sun Tzu’s teachings are practical, focused principles that can guide entrepreneurs and business leaders have clarity of their vision, their mission, and their commitment to the success of their teams’ goals and objectives. While it might seem farfetched for entrepreneurs to relate themselves to warfare generals, Sun Tzu’s philosophies are relevant, and are implemented by successful business owners of today and ignored by the unsuccessful. SunTzu_smallBusiness

08.08.13
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Getting To Know Your Competitors

Competition in Business

Getting to know your competitors is essential for any business – whether big or small, an established brand or new start-up. Love your competition because not only does it keep you on your toes and motivate you, but knowledge is power and understanding your competition provides you with lots of interesting information that can be used to mould your business and shape your marketing strategy.

I have always loved the competitive forces in this business. You know I certainly have meeting where I spur people on by saying “Hey, we can do better than this. How come we are not out ahead on that?” That’s what keeps my job one of the most interesting in the world. Bill Gates

Competitor Analysis

Competitor analysis is simply the process of monitoring and reviewing your competition, the products and services they offer and their adoption by their customers. Through this gathering of ‘competitor intelligence’ you can gain real insight that can be used to feed into your business strategy and marketing plans.

When undertaking competitor analysis keep in mind that your overall goal is to collate useful information that puts your business in a better position and gives you a competitive advantage over other companies in your industry.

The competitor landscape

There are a number of questions you should think about being able to answer from the competitor research you undertake. Beginning with a good understanding of who your competitors are.  Your competitor landscape is made up of both direct and indirect competitors. For example in the world of film magazines, Empire probably considers Total Film its most direct competitor, however its competitor landscape would include film bloggers, Guardian film online and even other interest magazines that may get chosen by a potential customer as an alternative reading choice that day.

Identify who your key competitors are but keep in mind the wider competitive environment and don’t forget to include international competitors if they are relevant. Remember if your selection of competitors to research is too narrow or excessively large you will struggle to get meaningful results.

Competitor SWOTCompetitor SWOT analysis

Carry out a competitor SWOT analysis on each of your chosen key competitors. What are their strengths and weaknesses – what do they excel at and what could they improve on? Are they doing anything that could be a threat to you?  For example have they just launched special price promotion,  new product or brand extension? What are they not doing (or doing) that provides a potential opportunity for your business?

When researching and comparing your competition,here are some questions you might find useful to think about including in your analysis:

  1. Where are you in position to your competitors? Who are the major players and who is the market leader. Where does your business fit in? Are you competitors growing  or shrinking?
  2. The four P’s. How do your basic four P’s (product, place, price and promotion) compare to those of your competitors.
  3. What are they doing well and what could they improve? How do your products or services compare with those of your key competitors – for example on quality, price and customer service.
  4. What is your USP and your competitors USP? What might make a customer choose your product or service over your competitors’ offerings?
  5. What partners and affiliations do they have? Are there opportunities here for you to develop similar affiliations with suppliers or associations?
  6. Brand and reputation. How strong is their brand? What is their brand image? What is their reputation within the industry (both with consumers and trade)? How successfully are they promoting their brand?
  7. Trends. What market trends do your competitors appear to be following (or not following)?

Start by researching online

A great starting point for small business is to do some website analysis by looking at your competitor’s websites. Creating a simple comparison table and undertaking an online competitor benchmarking exercise is a good way to get the ball rolling. Think about and compare competitor websites.  From this you can get a great overview of your competitors’ online presence and start  identifying potential gaps, opportunities and areas in which you could improve your own site.

And don’t forget, any kind of  competitor analysis should be continuously reviewed and monitored at regular intervals. Enjoy getting to know your competitors, and remember the better armed you are with valuable information the stronger position you are in for being both reactive and proactive in your business planning.