"Competition is always a fantastic thing" said Bill Gates. His well-documented friendly rivalry with the late Apple founder Steve Jobs changed the way we work and play, creating an exciting market, stimulating innovation and encouraging each business to be better. The thought of a world without Apple or Microsoft is a dreary one, and there is no doubt that the businesses wouldn't have performed as well or achieved as much without the other to compete against.
Competition makes us strive to be the best we can, whether at a personal level or business level. It stops us resting on our laurels, keeps us fresh, energised and dynamic.
For the consumer, a competitive marketplace improves choice, value and service. If a company's products are the same as everyone else's, the differentiator clearly lies in the service experience. Every business, without exception, should be focused on delivering a great service, whether a funeral parlour, a tech giant or a local convenience store. We might operate in a corporate world but people buy from people (and brands) they know, like and trust. Competition helps to create loyalty, as consumers may shop around to make sure they're getting best value, but ultimately they will have their preferred brand, and stay loyal.
For the business, competition improves efficiency, as we work to do things differently and keep up with new entrants in our markets. It creates pressure, motivates us and encourages the adoption of new technologies and different ways of working. And it leads to honesty and transparency: a business can't claim to be the first to launch a product if the competition got there first.
A little insight about your peers' organisations can go a long way towards helping refine your own operations. I'm not talking stalking or developing an unhealthy interest, I'm just suggesting you keep your ear to the ground. With insight enough to anticipate your competitors' next move, you can accelerate product development, improve customer service and invest in the right areas to make sure your business retains its competitive edge.
This might take a little undercover espionage, but it's important. Think of the poor small business owner featured recently in the BBC's Pound Shop Wars. When a huge multinational rival opened a few doors away, he went to check out the competition, and found many of his regular customers happily filling their baskets. "Do you feel bad about shopping here?" asked the interviewer to one of the small business owner's former customers. "No!" said one of the traitor shoppers, indignantly. But at least the small business owner knew his customers were tempted, and could begin the battle to win them back.
It may be obvious, but get to grips with your competitors' product portfolio, at the very least to identify gaps in their product set that your business can plug, and potentially for you to accelerate product development and bring products to the market more quickly. It's worth keeping an eye on product names and claims, too, so yours remain unique to you.
Customers will pay what they think something is worth. All businesses should benchmark their prices against those of their competitors - it's not about dirty tricks or undercutting, but it's about making sure your pricing strategy is an accurate reflection of the service you provide, in the market in which you operate.
4. Digital presence
It's perfectly acceptable to engage with your competitors via LinkedIn, and to follow them on Twitter and Facebook. Tracking the digital presence of a business gives you a snapshot of the organisation's values, customer care strategies, customer engagement and responsiveness. It shows you how they deal with issues. Many businesses use digital media to manage issues very well, and your business might just learn a thing or two from them. Imitation is the sincerest form of flattery, after all.
Chances are, you'll know people at your competitors' firms - it's a small world. Talk to them, glean what you can about the business, its strategy and its leadership team. Many employees like to move within an industry, to extend their skills and experience. Knowing what they want from a position could be the key to attracting more skilled people to your organisation.
6. Corporate Social Responsibility and values
There's no need to hug a tree or rebuild a rainforest because your closest rival is doing just that, but reams of research shows that people like to feel good about the companies they buy from. Look at the success of companies-with-a-conscience such as Innocent Drinks. If we have the choice of buying a similar product from a company whose ethics we respect, versus those we're not so sure about, many of us will go for the former. Whilst recreating your CSR policy with no substance behind it is only going to see you shoot yourselves in the foot, checking out your competitors' CSR policy is another good way to benchmark yourselves and a quick way to find out if what you're doing is enough.
7. Routes to market
Do any of your competitors sell via the Internet only? Perhaps some of your competitors' products are available only through wholesalers or channel partners. How your competitors sell gives you an insight into the likely short- and long-term strategies of their organisations, and might provide you with a few ideas on how to contain costs and increase your market share. Internet-only routes to market suit certain types of businesses, and guarantee low overheads, but it depends what you're selling. If you're in the tech or white goods industries, you're going to need a head office with customer service staff to ensure you're providing a high level of post-sales service.
8. Marketing and CRM strategies
How do your competitors position themselves to their customers? Why do you think they appeal- or don't appeal? Wising up to your competitors' marketing and communications is important, and shows you what your customers will accept and expect. Use their communications as your lowest common denominator, and go one better.
9. Vision and Mission statements
What do your competitors ultimately want to achieve? Have you achieved that already? Armed with this knowledge, your business can identify its real differentiators and forge ahead.
10. IT Systems
This one is tricky to master, but knowing a bit about your competitors' IT systems gives you more than just a temperature check for your business. It shows you how serious your peers are about their customers, staff and their future. This is where businesses run ground-breaking initiatives, where they set themselves apart from their rivals - and you should do the same. Antiquated, clunky IT systems no longer cut the mustard with tech-savvy customers expecting to do business on their terms, however they want, via whichever device they choose.
There are ways and means of finding out this information on your competitors without being accused of being nosey. Computer Weekly runs a series of CIO interviews, which provide you with some great insight into how businesses are using technology innovation to transform their businesses, and CIO magazine does the same. Twitter is also great to see what businesses are up to in the technology arena.
Don't let it turn into an obsession, or lose sight of your goal, but knowing just a few things about your competitors can turn your business from a good one, to a great one. Just ask Mr Gates.Suggest a correction