Know Who Your Competition is; it May Surprise You!


Every single business has competition. Apple has Microsoft, Walmart has Target and even if you are the only Mom and Pop hardware store within the city limits, you can almost guarantee that there is another one, maybe even a better one just down the road. The question is, what are you doing to be better than your competition?

 The first step is to define your competition. There are three different forms of competition: direct, indirect and replacement competitors. When you think of your competition the one that will most commonly stick out in your mind will be the direct competitors. They are the companies that offer the same products you do and they also have the same goals as your company. Indirect competitors are companies that offer different products with a similar end goal, for example your local burger joint and pizza restaurant are both competing to be your dinner choice but they offer different products. The hardest competition to identify will be the replacement competitors. They are the companies that offer a substitute product within the same customer base and revenue stream as your company. In this case it would be like if you were standing in the entertainment section and you choose to purchase a book over the DVD you were looking to buy. That book became the replacement for the movie.

 Your competition will vary depending on the size of population and city you are in but ultimately the consumer defines who your competition is. The consumer makes the choice to either buy your product or to utilize another company to fulfill their need. You need to listen to your customers, ask them questions, follow social media conversations and trends, understand what is going on in your demographics life to gain an understanding of what choices they are making and why.