Using Competition as a Strategic Tool

com·pe·ti·tion n.
  1. The act of competing, as for profit or a prize; rivalry.
  2. A test of skill or ability; a contest: a skating competition.
  3. Rivalry between two or more businesses striving for the same customer or market.
Competition is a natural part of how we live. In the environmental sense, we have survived as a species in part because we have successfully competed for resources necessary to our existence. In the social arena, we compete for jobs, money, partners, business and every resource we need. So why not build on our natural ability and become exceptionally competent at competing?

This is a beginning look at how we can use competition as a strategic tool to gain more business and to build purpose within our organizations.

Here are a few simple questions to ask yourself:

  1. Who are your competitors?
  2. What are your competitors good at doing?
  3. What are your competitors not so good at doing?
Knowing your competitors is the first step. We will not explore here how to know who your competitors are. There are many really good ways to get this information through market/industry research, polls, assessments and surveys, through your existing customer base and through your own sales force and other front-line employees. This is usually the easier step.

Once you have the information, what do you do with it? What action do you take that would create greater value for your business, your customers and your organization? Here are some simple principles you can use to develop strategies for your business.

1) Compete on the strengths; improve or eliminate the weaknesses.

Customers usually go with a vendor/provider because of their strengths and in spite of their weaknesses. Analyze those competitors that are winning in your industry. What are their strengths? Those strengths could be pricing, quality, convenience, availability and some of the more subtle strengths of brand recognition/reputation and trust. It is very important that you know what your customers seek in a vendor. Most marketing research reports evaluate what a consumer deems as important and how satisfied they are with that element. Use this information. Many times companies invest time and resources on improving areas that are not of high importance to the customer. Are you investing in improving the quality of your product when improving the quality of your service is of more importance to your customer?

2) Use Benchmarking to accelerate to a competitive position.

Once you know what will advance you into a more competitive position, you will need to move there quickly. There are many ways to discover how to do something, but why reinvent the wheel? If you are unsure on how to improve or change, look for exceptional role models of what you want to do. These companies are not competitors in your industry but handle business in a similar way. In this way, there is reciprocal open sharing of information and ideas.

3) Engaging employees in the game of competition.

Employees will engage in competition as part of their social interactions. They will compete against other functions within your company for territory or control, will compete for the company's resources and will compete against each other for promotions and recognition. Why not use this competitive energy against your business' competitors? To do this, employees need to know who your competitors are by name, what you are competing for (market share, orders, revenue, etc.), and the strength you are competing on (price, quality, ease of use, etc.). A side benefit of this competition game is that many of the internal conflicts dissolve in the face of a larger, external competitor to win against.