Friday, February 26, 2010

Study Your Competition

By Brian Tracy

Competition is a fact of business life, regardless of whether you work for an organization or for yourself. Price setting (either as a part of salary negotiation or a marketing strategy) is a good example. How would you answer this question: Who determines the prices you charge or the salary level you set for yourself? Would you point to your level of sales or your market share, or perhaps your years of experience? Many people would say that their customer or employees set the prices. Others would insist that they set their own prices. In fact, all of these are key determinants of your ultimate professional or business success.

Marketplace Competition

But the primary determinant is none of the factors mentioned above; it is actually your competition in the marketplace that sets your prices. You have competition whether your company sells its goods and services in the open market, or inside an organization where you are competing for advancement or scarce resources. For this reason, it is essential to thoroughly research your competitors and know them as well as you know yourself.

Don't Dismiss Your Competition

Many people in a competitive market situation make the mistake of dismissing the competition. The smart competitor does not look down on the competition, find fault with them, criticize them, or make light of them. She respects her successful competitors and makes it her business to study and learn from them.

Investigate Your Competitors

What do they do to win that promotion or get themselves hired for that job? What are their strategies and tactics for market penetration and market domination? How do they position their products or services? What alliances or networks do they build to ensure the success of their departments or divisions? Why do people buy from them? How do they service their customers and build relationships both within and outside of their organizations? What is their pricing policy? What new skills or training do they acquire to stay current? What is their approach to quality control? What volunteer or professional organizations do they join?

Look Outward

Once you have determined what it is that you do better than others in your career or business area, look outward. How will you position yourself or your product or service in the marketplace to capitalize on your area of excellence? What sales and marketing strategies will you adopt? Based on competitive pricing strategies, how will you price your products or services? Maintain the broadest possible scope when you are conducting research on what the competition is doing. For example, if you are in business for yourself, you may find that in some instances, the competition may not be another individual or company. You may find that you are competing against what appears to be another industry.

Action Exercise

Who are your most successful competitors? Why would your customers or potential customers buy from these competitors? What advantages and benefits do they perceive in buying from your competitors?