Know Your Competitors

Know Your Competitors

“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.” Sun Tzu : The Art of War.

As a key starting point in any marketing planning activity and then the subsequent delivery of marketing communications and business development, we need to establish at the outset, the competitive position of the business. It is not possible to fully succeed in business without a clear understanding of the alternatives that your customer is considering.

A great starting point is to remain humble and consider that you have, and are, nothing particularly special. From there, you and your organisation can build a hunger and desire, that matched with competitive acumen, will keep you at least one step ahead in your competitive positioning.

By competitive position, what we mean is the position in the marketplace that the business takes versus other companies offering similar products and services. It’s vital to think about this from a market-by-market basis as there may be different competitors operating in different markets.

Taking the charity sector as an example, a Competitor Review would establish the direct competition in this sector for equivalent services offered by other charities. Many of these will be very obvious with alternative charities offering similar and equivalent donor benefits and propositions.

There will be a Market Leader (number 1 in the marketplace), Market Challenger (number 2, vying for the top spot), Market Followers (a larger number of organisations who watch, follow and copy the big 2), Market Nichers (potentially profitable organisations who focus on a niche offer in the same marketplace).

When the relative competitive position is known, the organisation can strategically decide who to monitor, who to emulate, the trends to watch, things to avoid. It is vital to review and respond to campaign activities of the key, direct competitors.

Interestingly in the case of charities, where there is a limit to the available purse (the total amount that the market place of donors is willing to donate to that sector), the ‘share of purse’ spread across the competitors, is a key measure that points to their relative positions. In your sector, what’s YOUR market share? Consider both the volume of sales in your sector and the value of sales, when answering the question. If this question is too hard to answer then there is work to be done in reviewing more deeply, who you are up against.

It is not possible to create a SWOT analysis for an organisation before conducting a competitor review like this, because strengths are only strengths when compared to another organisation. Opportunities may come not only from macro trends but also from tactical things that competitors are or are not doing. Threats will be identifiable as they appear and weaknesses can be addressed by a coordinated action plan.

In some instances a competitor review may need to consider indirect competitors. In other words, other companies not offering similar products and services but delivering customers needs by other, unrelated methods. There is always a ‘customer does it themselves’ option and as such this could also be an indirect competitor.

As Sun Tzu said, “To Know Your Enemy, You Must Become Your Enemy”. Your work in competitive auditing is never done. For every move you make, your competitor will make a counter move, and if they don’t, then you should be even more afraid.