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Your Competitors Introduction This item provides tips on how to get to grips with your competitors. Many businesses see competitive information gathering as a cost but, as a list of benefits shows, the value to be gained far outweighs the costs. Listed here are 10 questions about competitors that most businesses need to answer along with the different sources of information available, much of it free. What it is Competitor intelligence is information about other businesses that may have a significant impact on the way you conduct your business. These may be: Your existing direct competitors whom you encounter on a daily basis. New competitors who may enter your market offering a new technology or simply to take a share of the market. Indirect competitors Why it is important It is important to seek information about your competitors and use it in making your business decisions routinely in your business. By doing so you will be able to: Evaluate your own performance against other suppliers Identify and exploit competitors« weaknesses Address competitor strengths Get new ideas Identify new customers Improve sales forecasting Keep your business planning focussed There are also other benefits, which are arguably more important, but difficult to measure. Competitor intelligence helps you to: Reduce complacency and improve discipline within your own business Foster an acceptance of continuous change Respect that other suppliers have satisfied customers and reasons for it Create a recognition that the business must continually seek to improve What you need to know The key thing to decide at the outset is what sort of competitor information you need. This will depend on the type of business you are, type of competition you face and market or industry sector you are operating in. However, most businesses need a basic set of information about their competitors. 1. Who are your competitors? There«s a little more to this question than meets the eye. You may find that you compete with different suppliers in the different product/service areas or markets in which you operate. To recap, your competitors include: — All firms that are supplying, or have supplied, your existing customers or that supply customers you have yet to do business with. Concentrate initially on collecting information and getting to grips with those suppliers that pose the greatest threats to your existing customer base or to sales of the products or services that you provide. New entrants. Keep eyes open for signs of any business that seems to be offering a new competing product, starting to win over your customers or be growing faster than you. Those businesses offering a substitute product or service, particularly if it has the potential to replace yours. These businesses do not need tracking quite as closely but observing them, say once a year at an exhibition, is good practice. 2. What do they offer? Find out what makes up their entire product range or service portfolio. Of course you are more interested in the products and services that you compete with, but remember that they are making decisions about resource allocations to their entire portfolio. How do their products or services compare with yours? Are there different features or benefits that you could consider incorporating in your own? Customers are not just buying the product or service itself. They are also buying into a relationship with the supplier. It is important to consider what other aspects of service they offer (e.g. delivery, advice, after-sales support etc.), and how these differ from yours. What can you learn from them? 3. What is their pricing policy? Customers will usually consider carefully the price of your products or services in relation to your competitors«. It isn«t always good to have a lower price. For example, if your price is lower, is your quality or are your costs also lower? If the price of your products and services is higher than other suppliers, are you providing additional customer benefits? Do customers recognise and value these benefits? 4. Who are their customers? Consider the different types of customer groups that your competitors are supplying. Are they managing to repackage one of their products or services at minimal cost to gain access to another customer group? Are they picking off the profitable customers in the market, leaving you with the less profitable ones? How are they doing this? Then ask which individual customers your competitors supply. Which are their big accounts? Are these customers also yours? Are they new customers you could target in the future? 5. How do they promote themselves? How are they attracting new customers? How active is their promotional activity? Do they advertise or use direct mail? What stories are they using to obtain press coverage? Do they employ field sales people, and if so how many? Do they attend exhibitions and, if so, which? How much as a proportion of sales do you think they are spending on promoting themselves? The important point is to see what key messages they are using, and what particular benefits are they claiming. Of course it helps to know whether they are specifically targeting your customers. 6. Who are their suppliers? Do they use the same suppliers as you? If so, are they on the same terms financially and personally? If they use different suppliers, why? Are these new suppliers worth investigating? 7. How financially secure are they? Company accounts can provide much useful information, and enable you to make direct comparisons. A couple of words of caution: When comparing company accounts, make sure that you are comparing like with like. For example, do their sales come only from products or services like yours? Are there differences in operation that may lead to lower or higher costs? If you know of such differences try to make sensible estimates and adjust the figures accordingly. If you are collecting this information for the first time, try looking back over the past three years to identify trends. Then you can monitor this information in future years. Obvious comparators like sales and gross profit margins are important. But look also for other factors that provide indications of their underlying financial health, such as wages, assets, debt, debtor and creditor payment periods, cash introduced and capital expenditure. From these figures you can draw some conclusions about the financial health of the company. At the same time don't underestimate competition which remained either oppressed or faced exclusion, Remember their accounts may be empty, however their potential is far more than you.They are likely going to bring quality products and services, with reasonable price. 8. What kind of organisation are they? The ways in which your competitors organise their operations can provide valuable information that you can turn to your own advantage. How do their organisations differ from yours? How have they set themselves up to meet customers« needs? Are there new ideas or better ways of operating which you could employ yourself? How many people do they employ? How does the workforce split between production or operations and administration? Do the directors hold other directorships, or are their efforts concentrated in the one company? Have they attracted staff from you, and if so how? How do their premises compare with yours? Do customers visit these premises, and if so, what would their impression be? Are there any aspects, such as location and décor, that give you or them an edge in serving customers« needs? 9. What are their strengths and weaknesses? You have potentially collected a lot of information about your competitors. Listing their strengths and weaknesses is a good way to summarise this information in a meaningful and usable form. What are they best at, and how does this compare with you? In answering this question, focus on how they meet customer needs and the particular benefits which they deliver in doing so. You should be alert to any areas where competitors are performing better than you. Now what are they less good at and how does this compare with you? Focus on where they are falling down in meeting customers« needs, providing you with an opportunity to exploit. Equally make sure that you actively promote any products or services where you have a competitive edge. 10.What is their business strategy? If you understand your competitors, you will be able to predict what decision they are likely to make in a given set of circumstances. This insight is extremely valuable to you. From all the information you have obtained, you can build a picture of the key characteristics of your main competitors that will enable you to make intelligent deductions about their overall business strategy. What can you learn from this? Whatever attractions you think that you have, customers are patronising other suppliers of their own free will ¬ you need to know why. If you don«t know why, you are stabbing in the dark. What you should do You should decide what information you need about your competitors. It may include some or all of the information listed above. You should then decide where you are going to get the information from. There are 3 main sources: 1. What competitors say about themselves 2. What others say about them 3. Research to meet your specific needs 1. What competitors say about themselves The first source of information is the competitor organisation to find out what they are saying about themselves. Remember that they control what is broadcast so it is one-sided information. How did you get started in the business? People like to be seen as stars in someone else's mind. What differentiates your company from the competition? This question gives them permission to brag. What do you see as a new coming trend in your business? Allow your contacts to share their knowledge with you. What do you enjoy most about your work? People like to talk about the things that make them feel good. What advice do you have for someone new to the industry or just starting out? Give your contacts an opportunity to be a mentor. What is the strangest or funniest thing that you have experienced in your business? How are these different from the revisions published earlier in the year? 2. What others say about your competitors There is also a large amount of information available on your competitors from independent sources. Some of this information you will have to collect yourself. Other information will be freely available in the public domain. However, don«t expect these sources to provide all the commercial details you may be looking for. 10 Minute Guide: To Get To Grips With Your Competitors Press releases Trade, industry or Press releases are a good source about what specialist press your competitors are doing that is new or different. Remember that they are usually informing the press rather than the press chasing them for the story. Exhibitions Exhibition stand Exhibitions can be a gold mine for competitor Sales people information. You can identify what new Your suppliers, agents products or services are on offer and any & distributors aspiring newcomers. Someone who is Your customers independent of your organisation should find it easy to collect literature and make general observations without drawing attention. But beware - your competitors may be just as interested in seeing what you have to offer. Web sites Competitor web sites Competitors« web sites are particularly useful Trade association and for finding information on the company network web sites background, product/service range, prices, promoting your the extent to which they are engaged in competitors e-commerce and internet selling, distributor network and their sophistication in using technology. Competitor Competitor premises Visiting the site, physical state and visits facilities of competitors« places of operation can be valuable. Think of a genuine and plausible reason for making an appointment. Company Companies House Company accounts are particularly useful accounts (0845 7573991 or for finding all financial information. These accounts are available online for a nominal charge. All your competitors who are limited companies or plcs are required to lodge their accounts at Companies House. 2. Research to meet your specific needs If you cannot find the information you need using existing sources, then you may have to pay for specific research on one or more competitors to be undertaken. 10 Minute Guide: To Get To Grips With Your Competitors Source Where to find it Comments Customers Your sales people Your sales people are particularly useful for finding information on how your competitors« customers view their offerings as well as their organisation and service levels. They should have a simple system for logging and reporting this information. Similarly, information about your company and how you compare with other suppliers is also invaluable in assessing your strengths and weakness in relation to theirs. Directories Local reference library Directories are particularly useful for Online directories identifying competitors and their contact including Kelly«s, details. Kompass, Yellow Pages and UK Directory Internet search Search engines An Internet search is particularly useful for www.humanservicesglobe.com press coverage. You will also find links to articles and research that provide information about the trends in your market. The information will be restricted to the material that your competitors have posted, or the press coverage they may have gained. Market research Keynote General market information reports are companies (www.keynote.co.uk) particularly useful for companies Mintel who are competing, or thinking of (www.mintel.co.uk) competing, with larger suppliers. Market ICC for credit and research reports may be available for your business information industry, and can often include details about (www.icc.co.uk) the main suppliers. Source Where to find it Comments Market research Business directories The main aim is to identify particular in are agencies Yellow Pages as where the customer does not wish to The Market disclose sensitive or negative information to Research Society a representative of your business. A third (www.mrs.co.uk) party will provide a more objective and detailed view. What to do now 1. Decide what you need to know about your competitors to inform the business decisions you are making. 2. Allocate resources to obtain the information, both as a one-off and then on an on-going basis. 3. Select and use appropriate sources of information, starting with the free ones. What type of business do you have? Where is it headquartered? Who is backing it? What are the company's key products or services? Can you send me an annual report? What are the results, they really want to have? Same couldn’t be accomplished previously, Why? Who owns it? What do they have to do to develop services to meet the anticipated needs of customers? Will this new effort lead to other opportunities? Can I get written information on the company’s financial status, last five years and ownership? Type of business activity What is the objective? What will be the benefit of the change? What is the formal education of the top executive like? When, Why, where was the merger filed? Who filed the merger? What kind of a company is it, Non governmental organization, subsidary,division, a partnership, propretorship, or a corporation? Who are the competitors? Can I get a copy of the articles of merger? Where is the company based? Where is it incorporated? Date of incorporation Can I get a copy of the articles of incorporation? Their previous customers, who are some customers I can talk to? Who are the top executives? Have they been in legal troubles? How are things going to change? What kind of a company is it, a partnership or a corporation? With example of cases, How do you set yourself part from your competition? How long has this company been in business? Your company has projected as one of the few companies having global operations, What can you do that no one else can do? Tell me about some of your sucess stories. How reliable is this information? To what sector does your organisation belong? How many employees has your organisation? What is your organisation's turnover? For what category of organisation are you employed ? Select option that most closely fits your organisation 1. Government Department 2. Local Authority 3. Health Executive 4. Other Semi-State Agency 5. University 6. Other Public body 7. Non-Govermental Organisation (NGO) 8. Cooperative Society (supplier owned) 9. Cooperative Society (worker owned) 10. Cooperative Society (customer owned) 11. Unlimited Company 12. Private Limited Company 13. Public Limited Company 14.Subsidiary of Another Company If a privately owned company, is it a family-owned business? Yes No If a public limited company, please select those stock markets where your organisation is listed. Dublin Dublin (IEX) London London (AIM) NASDEQ New York (NYSE) Other, please give details If state owned, which state owns it? USA Other country, please give details If a subsidiary company, what type of company is the parent company? USA Company Foreign-owned Company Cooperative Society If a subsidiary company, please give approximate turnover of ultimate parent company / group. What have been the biggest problems in building the company upto now? Who are the competitors? How many resources are there? How do we allocate resources? References, e.g, Bank, admin, private party. D&b and DUN is any Number of employees Person authorized to receive all cards Person requesting cards |