In the words of Victor Kiam, an American entrepreneur and TV spokesman, “In business, the competition will bite you if you keep running, if you stand still, it will swallow you.” What he said is true as we witness in today’s business world, a fight for the largest grab of the market share, the fight to survive and outgrow unless you wait and do nothing and be swallowed by the competition. Therefore, competition exists everywhere, be it between big companies or among the startups.
In this article, we will discuss about the competition in startup business and strategies to survive in the competitive environment.
In any business, being the founder(s) or owner(s), we must answer the two very important questions: How different our product is from what is available in the market? And who are our competitors? Some of us might think that it is a secondary aspect and our prime focus should be on our own product. Yes, the prime focus is your own product, but how do you make sure that the product you are creating caters to customers – customers not in your mind, but customers who will actually choose you or your brand over any other company selling a similar product. You have to know what other businesses in the similar field are doing and then do it in a better and smarter way and gain traction and the market share.
Before doing anything you should know the meaning of the word “market”. Market is a combination of three broad factors; Customers, Competitors, and Suppliers. Usually, we misinterpret the term ‘market’ and just associate it with ‘customers’ ignoring the two very important aspects – competitors and suppliers.
Competition is a remarkable driving force. It makes you move forward in the right direction. Therefore, competitive analysis should be an integral part of any business plan, especially if you are in a startup stage. This makes your aware of the landscape you are operating in. Startups must do their SWOT (Strength, Weakness, Opportunity and Threat) analysis along with their competitors. The SWOT analysis should be done based on the information like who are your competitors, what are they doing, what are their future plans, how have you planned for marketing and selling as compared to your competitors etc. If you are not doing this, you will be losing out.
Companies with unique ideas or businesses too need to do the competitive analysis. Because, they face competition even when they are looking at the same customer base as the other company. Even if your startup is a brand new idea and is gaining traction, in no time you will see companies mushrooming up as your competitors. If you still feel, you will have no competition, then you are doing something wrong, something that is not going to engage customers.
For doing the competitive analysis, first, you should know who is your competitor; is it a startup, a big player, or a company producing substitute goods. If it is a startup you should be happy and stay on top of their moves. But, if it is a really big player and an established one, with loads of capital and links and market share, you might have to change your plan.
The next step is to gather as much information about them as possible. Below mentioned are the various ways to collect the information about your competitors.
- Approach customers and take their feedback on why they would choose one competitor over the other.
- Go to the website(s) of your competitors and study them.
- Study the various news and read about them.
- Read the press releases and presentations of your competitors
- Subscribe to their new letters, blogs and social media pages
- Study about the marketing and advertising strategies of your competitors.
Once done with the competitive analysis, focus on your actions and make sure those actions are coming from a good research and analysis of your competitors. After all, this is the era of competition where Charles Darwin’s theory “Survival of the fittest” stands true not just for species but even in businesses.