Study the Competition

Basic Business Cents

Learning from the Competition

Sam Walton was fond of saying that he had been in more Kmart stores than any Kmart executive. He started a Wal-Mart culture of visiting with customers, employees, and competitors in the field to constantly come up with new ideas for continuous improvement.

Visiting aimlessly profits nothing. Just like the saying, “The best extemporaneous speech is well rehearsed”, the best visits are well planned. Some questions about your competition to be answered are:

1. Who are your competitors today and what are their strengths and weaknesses?

2. What rival product/service is most competitive with your product/service?

3. What studies do you have comparing your major product/service with your rival’s product/service in respect to the quality requirements demanded by your major users/customers?

4. What differentiates your products/services from your competition?

5. What are the major strategies and thrusts of the competition?

6. In what new directions are competitors moving?

7. Where are you vulnerable to competitors?

8. Where could unknown competition appear?

9. What are competitive trends?

10. What minor competitors could become major?

11. In what areas that customers care about are you stronger than your competitors?

12. Answer why to each of the above questions.

Be sure to supply data wherever possible and not just opinions. To get this data you need to venture out of your environment and into that of your competition.

Dr. Deming used to say, “Nothing is so pervasive as a lack of a good competitor.” Complacency from a lack of a good competitor can cause us to relax and fade away. Studying good competitors can motivate us to excel and prosper.