The objective of this series of questions is to help entrepreneurs identify and carve out their “strategic positions” in the marketplace, and it would be just about impossible to start a business without taking some time to study the competition.
There are three major types of competitors to consider.
First, you need to pay attention to the other small business owners in your community who compete with you directly. Like you, these are the small businesses just getting started, with limited capital and limited resources. List three of these competitors, and study their websites. If you are in a brick and mortar business, go pay them a visit. See what they do well and what they don’t. You will immediately begin to recognize how you compare and how you can begin to leverage your strengths to differentiate yourself from the competition.
Second, you should study the successful, brand-name businesses with whom you are competing. For example, if you are starting a public relations business, you should check out the Burson Marstellars
and the Hill and Knowltons
of the world. It might not feel like you are competing with international brand named companies from day one, but consider how much time and expense these brand-name businesses have invested in their marketing. Learn from their successes and mistakes. List two or three of these types of competitors and study their messages and the way they describe their services. You will learn a lot.
Finally, you should take some time to consider who you are competing with for “mind share
.” For example, if you are offering public relations services to small business owners, you might take some time to check out all of the other service providers that help to promote small businesses. You might not think you are competing with advertising firms or branding firms, but the truth is that most small business owners don’t know the difference between PR, advertising, marketing, branding, etc. They are only interested in promoting their businesses, and if an advertising firm reaches them first, that’s where they are likely to invest.
Use your marketing imagination to consider all of the businesses you are competing with for mind share, and study them. What you might learn in this case is how to broaden your branding and marketing strategy to attract customers who weren’t even looking for you in the first place!
This is the method I use to study the competition from a messaging, positioning, and branding point of view.
Feel free to comment any interesting epiphanies you have when taking the time to study your competitors.