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Five potential competitors and how to overcome them

When beginning a new business, it is critical to consider who the competition will be and how you can overcome them.  There are a wide variety of competitors, some of them are common knowledge while others may be surprising but they all need to be considered when working on who your potential competitors are.

  1. Direct competitors: these are people who supply the same product as you to the same target market. An example is two groceries stores.
  2. Indirect competitors: this competition comes from people who offer a similar product which will satisfy your customer’s need. A fish and chips shop and a fried chicken shop are both able to satisfy the hunger of a person.
  3. DIYers: The do-it-yourself people believe that they can produce the product by themselves. They do not need to spend their hard-earned money on your product and they could also improve on the product to suit their individual needs. People who are grossly affected by this are photographers and travel agents.
  4. People who do nothing: A large portion of clients will view your product and admire it but will not be encouraged to make a purchase. They may think that they can do it at another time or they do not truly need what you are offering. This type of customer is the most common.
  5. The bargaining power of your suppliers. Another potential competitor is the supplier. They can determine the price you pay to create your product. Furthermore, they may sell your product directly to the consumer.

We have now identified who the competition can be but how can we overcome them. Here are three steps which can help you beat your competition.

  1. Ensure that you have an excellent brand which people can associate with easily. Make the brand visible through all the media that your potential customer uses. Communicate your unique selling point to the customers at every opportunity that you get.
  2. Have a competitive edge. There are three ways that you can have a competitive edge. You could offer the product at a cheaper price, you could offer a superior product or you could give great client service. All these can give you a competitive edge, but you must be careful about offering a cheaper price because this could undermine the whole industry. As your competitors may just lower their prices to match yours.
  3. Communicate with your customer. It is important to build a lasting relationship with your customers. By building a relationship with them they will be less inclined to go to your competitors. You can do this by sending out monthly correspondences where you inspire and show them how to do their business better. You can also offer them a reward if they fill out a customer satisfaction survey so that you know what they like about your business and what areas you need to improve on. Lastly, excite your customer. Come up with innovative ways to encourage them to talk about what is happening in your business. You could do this through promotions or creating a buzz around a new product which you are about to release. This will encourage word-of-mouth marketing which may lead to more feet through your door.

Never fear competition, but see it as an opportunity to grow your business in innovative ways and to keep you on your toes.

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