Dealing with competition

Competition is a certainty when you get into a business that meets customers’ needs. As soon as other entrepreneurs see the potential in that business they will immediately rush in to set their own businesses to service the same customers you are servicing or providing the same service in an area you are not yet present. Sometimes when business leaders hear the word competition it sends shivers down their spine.
They will find every way to bring the competition down. Other business leaders even go to the extent of trying to kill the competition by buying it out or taking legal action to make sure that they will never see the light of day.

What these leaders don’t realise is that competition is both good for your business and for the consumer.
If no one wants to start a business in your type of industry it might mean that it’s not profitable, unless if there is a huge barrier to entry which prevents others establishing their own businesses in that industry.

You need competition as an entrepreneur. You need to embrace competition and see it from a positive perspective. You learn a lot from your enemy.
Your competition can teach you the biggest lessons. Sun Tzu wrote in his book Art of War, “Keep your friends close and your enemies closer.”
You are in business to make money through your customers. Where there is stiff competition you will be forced to focus on keeping your key customers happy.

As one of several companies offering a similar product, you are forced to compete for customers. You have to ensure that you improve your customer service if you have to attract and retain customers. All this will benefit the customers as well, as they will receive excellent service.
In some cases you might have to change your strategy and adopt a focus strategy where you have to focus on your core customers.

Because of competition you have to pay attention to your target market and provide better service/product to your customers and keep the competition at bay.
Usually when your business is doing well, when sales are booming and you are making profits, you tend to give minimal attention your customers.
However when there is competition, you’ll pay much attention to your customers. Competition brings out the best in you! With competition breathing on your back you are kept on your toes and so you have to keep your product or service fresh, appealing and attractive to customers.

You also need to you work faster and smarter. You can’t remain uninterested when there is stiff competition otherwise you lose your customer.
Competition makes you creative and innovative at whatever you do. If you have to succeed in your industry then you better be innovative.
But if you’re the only player in your industry, there won’t be any urge to be creative. In a competitive market you have to do something unusual to succeed or else you become extinct. Healthy competition encourages change which will distinguish your company from others.
You have to do something that makes your company to stand out. Competition opens your mind and eyes to ideas. Without competition, you don’t have the motivation to go the extra-mile in delighting your customers.

However where there is competition and if you keep your eyes open to ideas, you can learn a lot from your competitor’s strength and weaknesses and capitalize on it to improve your product or service.
Complacency sets in without competition. The presence of competition shakes off complacency.
When you are consistently under pressure from competition, you and your management team will try to excel by pushing yourselves to the limit.
Nancy Pearcey an American evangelical author said “Competition is always a good thing. It forces us to do our best. A monopoly renders people complacent and satisfied with mediocrity.”

Competition is a good teacher. Seeing what your competitors do well can teach you a lot about your business.
Your competitors will come up with certain business practices which will provide you with invaluable insight into the state of the market, and shows you what works and what doesn’t.

You can benchmark some of your activities with your competitors if they are industry leaders.
Without competition, you might not pay particular attention to your strengths and weaknesses. However stiff competition forces you to identify and study your strengths and weaknesses.

You will thus have to work hard on your weaknesses and exploit your strengths to outperform your competition.
If you have to succeed in a competitive environment you need to avoid your competitor’s strengths and find their greatest weaknesses and exploit it. You should never stop learning from your competition.

l Stewart Jakarasi is a business and financial strategist and a lecturer in business strategy and performance management.
He provides advisory and guidance on leadership, strategy and execution, preparation of business plans and on how to build and sustain high-performing organisations.

For assistance in implementing some of the concepts discussed in these articles or in strategic planning facilitation please contact him on the following contacts: sjakarasi@gmail.com or +266 62110062 or on WhatsApp +266 58881062