A business is surrounded by various agents and stakeholders. They are not the only one operating within the business environment. Whether there are internal shareholders like employees, managers, owners, investors or external shareholders such as customers, creditors, suppliers, the wider community or the competitors – all of them, in some way or another can affect your business.
Some agents have an extremely profound impact on your business policies and strategies, while the other agents have little to no influence. Competitors fall in the former category as after customers (some would argue even before the customers), they are the most dominant and powerful agents when it comes to having some kind of an impact over your business.
Since competitors are a fundamental and inherent part of the business landscape, one needs an effective monitoring strategy in order to outsmart the competition. In the real world where there is no such thing as ‘perfect monopoly’, it is given that all businesses face some kind of competition lurking around. Whether the competition is extraordinarily rigorous or mild is another story altogether.
Why Do We Need an Effective Competitive Monitoring Strategy?
The business landscape is driven by competition. While competitors do promote a healthy competition and offers benefits to businesses like engaging in price wars, one cannot deny that it adds a negative element to businesses. After all, they are constantly vying for your market share and waiting for the perfect opportunity to make a move and strike at your business, thereby effectively kicking you out of business.
We live in a world which religiously follows Darwin’s theory of survival of the fittest. The same theory is applicable to today’s intense and competitive business environment. Every business organization, in order to survive and thrive, needs to come up with ways to overcome and outmaneuver the competition. For such an instance, it is important that every business organization carries out a competitive monitoring analysis and comes up with an effective strategy to ensure that they not only survive, but thrive the competition.
Having an effective competitive monitoring strategy is a great way for businesses to gain an edge over their competition and workout strategies to outperform them. Competitive monitoring strategy entails collecting information on competitors and then converting that collected information into intelligence. For your monitoring strategy to be effective, you then need to use that intelligence intuitively to come up with counter strategies that outsmart your competitors’ strategies.
You need all the information you can get your hands on in order to beat your competitors. Competitive monitoring analysis facilitates you to get answers to the following questions:
What are my competitors strengths?
How much production costs are they incurring?
Which consumers are they targeting?
Are they planning to introduce new products?
Is there a market that remains untapped?
Why are they enjoying soaring profits?
How come they are not suffering losses?
Is the new marketing campaign effective?
Are they suffering a setback because of their immoral practices
Do their products have the potential to replace your products?
Answers to these questions and many others similar to these are extremely valuable as they give you an idea as to how your competitors think and act. This in turn is very useful for businesses, as we will see in the following section.
In What Ways Can Competitive Monitoring Be of Help to Businesses?
“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.” – Sun Tzu, The Art of War
The above quote successfully summarizes the importance of knowing your enemy inside out, along with being aware of yourself. In the context of business environment, it means that a business needs to have a clear understanding of their competitors’ thinking and practices; otherwise you are destined to suffer a loss – no matter how successful or promising your strategies are.
Having established the importance of competitive monitoring, this article will discuss how it can be of benefit to your business.
Helps in forecasting and anticipating competitors moves
A competitive monitoring analysis helps your business to uncover potentially useful information regarding your competitors which allows you to predict and forecast your competitors’ moves and strategies in the near or distant future. The competitive monitoring analysis entails highly useful information on a broad number of things. For instance, you can gather information on a new product your competitor is planning to launch or perhaps a new marketing campaign that sounds promising. All in all, any information that you can gather can aid you in anticipating your competitors’ strategies which can then give you time and resources to design your own counter strategy to outsmart your competition.
Allows you to develop strategies in order to minimize potential losses
Having learned from your competitors’ mistakes and making sure that you avoid them at all costs is perhaps the best way to minimize any potential losses that you may or may not suffer. Since your competitors are constantly under surveillance – thanks to your monitoring – you can get to know about their marketing campaign that failed or the newly modified product that was unable to warm its way to the customers hearts.
Furthermore, constant and close monitoring means that you are thoroughly aware of your competitor’s future plans that might have a negative effect on your profits which gives you the time to build up barriers in order to reduce or mitigate the risk of those losses. If your competitor is planning to start a price war to get you out of business, competitive monitoring allows you to take steps to avoid it or mitigate the risk from it.
Provides an opportunity to analyze the threat that competitors are posing
Competitors are a serious threat to businesses. It is important that you analyze and assess the magnitude of the threat that they are posing in order to determine if you have the ability to survive the threat and come out stronger. By monitoring your competition and keeping tabs on them, you can assess for yourself how big a threat your competitors are. This can then help you determine strategies to keep the threat at bay and out of your way. But, in case you find yourself confronting the threat, you will be well prepared to compete with them without risking catastrophic losses.
Also, competitive monitoring allows you to keep tabs on who is exiting the market and who is entering. Meaning, you are able to see any new threats in the form of incumbent firms and eliminate them before they establish a strong footing in the industry.
Helps in discovering untapped market avenues
There are always gaps existing in the market which are yet to be untapped. Not everyone is able to discover the untapped market avenues though as it requires detailed and intricate knowledge of what products your competitors are producing and which consumers they are serving to. Competitive monitoring analysis can help you discover the inconsistencies in the market as it amasses a detailed report on your competitors strategies and practices. Thus, after having uncovered the untapped market, your business can come up with products and services that cater to customer needs that were previously left unmet.
Prepares businesses regarding how to deal with unwelcome surprises
Unwelcome surprises are always there, lurking around the industry. Whether those surprises be in terms of a change in industry rules and regulations, a shift in consumer preferences or possible modifications to your competitors strategies – they all have the potential to weaken your position in the market. Competitive monitoring enables you to have preliminary knowledge of the changes and shifts to industry which can help you better prepare strategies to deal with the unwelcome surprises.
Serves as an immensely useful tool to make better informed decisions
Think of it like this; when you have laid the groundwork for a particular project, you are better able to tell if it will thrive or not as you are aware of all the intricate details and factors that can affect your project. Similarly, competitive monitoring means that you are aware of what your competitors are doing and how it can affect your position in the industry. This allows you to make better informed decisions with respect to your company strategies.
Gives you insight to the industry from your competitor’s perspective
It is always better to get a second opinion. Competitive monitoring makes you see the industry from your competitor’s perspective which can be of a lot of value for your business. Because you see the industry dynamics from the competitor’s perspective like how they envision any future changes in industry trends and customer demands, it helps you construct a long term plan. Also, you might get to know something new and valuable about the industry or customers which otherwise, you might have missed out on when you were only taking your own opinions into account. Thus, it helps you get a different angle and different view on the same industry.
Offers opportunities to partner with your competitors
Even though competitors are considered as the ultimate poison to businesses; as your partners, they can be very valuable. Competitive monitoring, with the extensive information on your competitors it supplies you with, helps you see companies which could be potentially a partner material. Maybe one of your competitors are having cash flow problems and are looking for a buyer, or they might be having thoughts to partner with another firm – whatever the case, your business can swoop in and propose partnership or a merger. Thereby, strengthening your position in the industry.
To survive and thrive the competition, competitive monitoring is extremely important. It offers businesses a wide array of benefits. Thanks to the Internet and social media, competitive monitoring is no longer a challenge. We have been doing it for years and can do it for you, so read more about our Competitive Monitoring services by clicking here.
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