Do you really know who your major competitors are? Most business owners think it is the business down the street that sells the same product or service. Maybe it is ... or maybe it isn't.
A major competitor does not necessarily have to be someone who sells the SAME product or service. It could be someone who sells a SUBSTITUTE product or service. It could even be a change in lifestyles or a change in technology. Here are some examples.
Suppose you own a bowling alley with a small lounge. The members of the Tuesday night bowling league typically stop in the lounge after bowling and have a sandwich and a drink. Your state legalizes casinos and a new casino opens in your town. The league members now go to the casino after bowling instead of going into your lounge. Eventually, the members of the league decide to stop bowling and go to the casino every Tuesday night. Your competitor is not another bowling alley or another lounge. Your competition is another recreational activity.
Many country clubs think that their main competitors are other country clubs. In addition, they think that for the past 10 years potential members haven't had the money to join. That's wrong. Their main competitor is a change in lifestyle. Ask anyone who is 60 years old or older and you will find that there were very few organized activities for them when they were 10 years old, and they were able to walk to them. Today, most parents are driving their 10 year old to organized activities four nights per week and on Saturday. Parents don't have time to join a country cub. It is not that they don't want to golf or don't have the money to pay the dues.
Take a look at daily newspapers and other publications. Some newspapers are in towns that have no other newspapers. Yet they are going out of business. It certainly isn't a competing newspaper that is causing their problems. It is a changing technology.
Of course, competitive situations differ from business to business and industry to industry. The important point is that as a business owner or manager, you ANALYZE YOUR COMPETITIVE SITUATION. Take a careful look at your situation. Make sure you are not making business decisions based on the wrong competitive situation. Those kinds of decisions can put you out of business.
If you have a unique competitive situation, I would love to hear about it. Please post your comments. They are always welcome.
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1 comments:
Ron, very good article. Something even marketers will miss out while strategizing. So ad agencies, design houses and PR firms' competitors may not be their same kind, but the clients themselves! In this economic winter, many business owners chose to put on marketing caps. :)
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