9.3 Know your competition
Key service concept:
The greatest mistake managers make when evaluating their resources is failing to assess them relative to competitors.
Obviously, competitors are also important. Being "better" than the competition rarely means doing one thing better. It usually means doing many small things just that little bit better. It is about going the extra mile or one step further. To do this you need to know the service that your competitor provides and what your competitor is doing. By knowing this type of information and how they are meeting customers' needs you can improve your service.
Before doing this, of course, there is a more fundamental question: Who are your competitors? Your organisation may already collect and research such information. In some cases the answer is obvious, but do not leap to a simplistic conclusion. Do not read on until you have given the problem below some thought.
Activity 9.3
Assume you work for a company that produces gift-boxed pens ("fine writing instruments" as marketers sometimes like to call them). Stop for a moment and think about the answer to the question: Who are your competitors? Jot them down now.
Have you considered that gift-boxed pen makers can no longer simply view other pen makers as their sole competitors? They are up against a whole gift and communication industry that is competing for customers' time and money.
For the pen maker, you may have answered companies such as Bic, Parker, Cross, Schaefer and other companies who sell gift-boxed, quality writing instruments.
Did you come up with anything else?
Certainly, other makers of fine writing instruments should be considered as competitors. You could consider that your competitors are also marketers of small gift items such as lighters, leather bound diaries, desk sets and the like. If you identified the makers of such gift items as competitors for gift-boxed pens, then you have a much more complete answer.
An aside: Get real
Winning companies see the environment for what it is and themselves for what they are. It is all too easy to see things as we wish them to be not as they are.
Like everyone else business people are prone to overestimate their own strengths and their competitors' weaknesses. Companies most often misperceive eight realities:
- your strength in your market
- your quality, especially as compared with that of your competitors
- what your customer thinks of you
- why your noncustomers aren't dong business with you
- the potency of your competitors
- the cost position of your competitors especially as compared with your own
- the potential impact of merging technologies and market segments
- your projection for your product's future.
Adapted from: Hamermesh, 1996
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