For successful operations, the business will need to deal with customers, suppliers, employees, and others. Almost always there will be other businesses or companies offering similar products to the same customers. These are your competitors. And their objective is the same as yours - make money and succeed. Effectively, the businesses are in battle - fighting to gain the same resource and territory or market share you are - the customer. And like doing battle, it is necessary to understand the enemy: - how they thinks - what his strengths are - what his weaknesses are - where they can be attacked - where the risks are
Just like in battle, the competitor will have secrets that can be the difference between profit and loss, expansion or bankruptcy for the business. Identifying these secrets is thus crucial for business survival.
But all this is not new...as it has been written in Sun Tzu and the Art of War.
Around the year 500 BC, the great Chinese military strategist, Sun Tzu wrote a treatise on the Art of War. This work is still relevant today with advice to both military commanders and businesses on winning against competitors:
If you are ignorant of both your enemy and yourself, then you are a fool and certain to be defeated in every battle.
If you know yourself, but not your enemy, for every battle won, you will suffer a loss.
If you know your enemy and yourself, you will win every battle. Who is a competitor in business?
Business competitors are:
- Other organizations offering the same product or service now
- Other organizations offering similar products or services now
- Organizations that could offer the same or similar products or services in the future
- Organizations that could remove the need for a product or service Why monitor competitors?
By knowing our Competitors we may be able to predict their next moves, exploit their weaknesses and undermine their strengths. Customer's usually know the differences between companies - their good points and bad points. They know that company A is cheaper than company B and that company C has a better after-sales service. For a business to operate in a market and not know the same, and more, is tantamount to giving up the battle without even starting.
As Frederick the Great said:
"It is pardonable to be defeated, but never to be surprised." So what is involved?
There are four stages in monitoring competitors - the four "C"s:
