Knowing and studying your competitors is an ongoing project. Competition may well dictate much of your operating strategy. The depth and breadth of your competitors will dictate how aggressive your operating plan should be. It is very important to think through the consequences of your operating and marketing strategies so that you can anticipate competitor reaction. Never operate blindly. You should not be obsessed with your competition, but should always be well versed in how they operate their businesses. Expand upon what they do right and learn from what they do wrong.
Another thing to remember: Good competition benefits your business, while bad competition hurts you. No competition at all tells us that the new business venture is likely to be ahead of its time. There are advantages and disadvantages to be first in the marketplace. The main advantage is that as long as you remain creative, the other players have to play “catch up”. Conversely, being first typically requires longer staying power because you are paving new ground. Also, you may open the door for the competitor with more resources, making it more expensive for you to stay in the game.
A great example of being ahead of your time is Netscape. According to Tom Friedman’s “The World is Flat”, Netscape drove Internet communications to a whole different level and likely was the greatest influence on where we are today. But, lo and behold, along came Microsoft. Because of the impact of its operating system technology, Microsoft was able to give away that for which Netscape had to continue to charge. Don’t you think this adversely impacted Netscape’s value? But, we wouldn’t cry too much for John Barksdale, one of Netscape’s founders and leader. He literally changed the world for the better and achieved what most of us only dream of.
No comments:
Post a Comment