There are many factors that can contribute to business success or otherwise. When first starting out, business owners can be focused solely on serving customers that they forget to check out the competition. In this article, we address why it is so important to keep an eye on business competition and how a business can learn from other businesses in the industry.
Keeping Up With Trends
Business success can depend on a business’ ability to differentiate themselves from pre-existing companies offering similar products. However, in saying this a business need to keep an eye on what types of products are “trending” in the industry and ensure that the business stock these fast-moving items.
This will ensure that they have their finger on the pulse when it comes to satisfying their customers’ need for the latest trends. If they fail to keep an eye on trends, they risk losing their customer base to competitors who are supplying the products they don’t have.
The best way to do this is to research regularly. It can be as simple as a search on Google, but the business could also check out their competitors’ stores and see what types of products they are promoting.
Learn from Competitors Mistakes
Especially when a business is just starting out, a great way to know what not to do is by researching what has worked for competitors and what has not. This is a great way to learn from competitors and to prevent the business from making the same mistakes they did.
Check Out Their Online Stores
Another great way to learn from a business competitors is to check out their online stores if they have one. This can give the business an idea of how they market their brand, the purchase process and their price lists.
This is valuable information especially for businesses who are just starting out. You may find for example that the competitions prices are unreasonable, and if possible, you can use that to find your point of difference: lower price for customers.
Business success You may also learn a bit about how to market your brand, for example, one company may market their products toward a specific age range or gender. Think about whether or not you can use this again to differentiate your brand from theirs, such as offer something that they don’t.
Another great way to learn from business competition is to compare their finances to yours. Key figures to compare include their gross, operating and net profit margins, as well as salaries and compensation. What are your competitors’ sales and profitability trends? And what are their marketing expenses as a percentage of their revenue?
By looking at the competitions finances and yours, you can identify any discrepancies within your business and try to correct them as soon a possible.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.