2017-02-08 00:00:00Growing a BusinessEnglishLearn from your competitors' successes and failures by viewing them as your closest allies in the business planning process.https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/06/Real-estate-agent-sets-out-open-house-sign-to-beat-business-competition.jpghttps://quickbooks.intuit.com/ca/resources/growing-business/competition-actually-best-friend/Why the Competition is Actually Your Best Friend

Why the Competition is Actually Your Best Friend

2 min read

You may be tempted to stay as far away from the competition as possible. Cozying up to business competitors seems to undermine your ability to establish your own niche in the industry. Because you want to avoid becoming a carbon copy of your competitors, you might decide to do your own thing and leave them alone to do theirs. To an extent, this logic makes sense. Spending too much time worrying about your competitors is counterproductive and takes time away from honing your core competencies and promoting your business. However, there are clear benefits to taking the time to study your competition, and determine what they are doing wrong and what they are doing right.

Copying Their Successes

When a competitor does something right and reaps the benefits, you shouldn’t sit back and let them enjoy all the spoils of their victory. Incorporate what worked for them into your own business model, put your own spin on it, and use it to your advantage. In 1967, Procter & Gamble developed and brought to market the Pringles brand potato chip. Stacked and packaged into a cardboard cylinder rather than piled into an airtight bag, the chips suffered less breakage and remained fresher for longer. Consumers took notice, and the Pringles brand became a rousing success. However, if you scan the snack aisle of any supermarket today, you’ll notice that several competitors have replicated the stacked potato chip model. There is nothing wrong with incorporating ideas that have worked for competitors into your own branding strategy; the biggest and most successful companies in the world do it, and you should, too.

Learning From Their Failures

By identifying where others have gone wrong, you can save yourself a lot of trouble that would result from making the same mistake. For example, during the early 2000s, a product called Olestra brought a lot of buzz to the snack item. Olestra purportedly provided chips with the greasy, fatty flavor that makes them taste so good, without any of the fat content. Several brands jumped on this product, marketing a new fat-free chip without the stale, fat-free taste. Unfortunately, Olestra was an unmitigated disaster. Olestra caused all kinds of stomach ailments and gastrointestinal distress to those who consumed it, and its use as a food additive was banned in Canada. The companies that held off on using Olestra and waited to see how their competitors fared with it were the big winners, as they escaped all the negative press that swarmed the product.

Gaining a Competitive Advantage

Keeping up with your competitors helps you hone in on where your niche should be and perfect your brand strategy. You have to know what your competitors are doing to identify where you have a competitive advantage over them and take advantage of it. Your competitors may be your worst enemies in the marketplace, but they can be your best friends in business planning.

References & Resources

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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