Business strategy is a widely misunderstood topic, but one that I absolutely LOVE. Ask 100 business leaders to define strategy and you’ll be likely get 100 different answers…but, in its simplest form, your business strategy is your plan for getting from where you are today to where you want to go. Important, right? Your strategy could cover 6 months, 3 years or 25 years. I have plans for all three! No matter the length of time, it’s vital to have a well formulated strategy (i.e. – plan) AND for it to be ever-evolving. Developing your strategy requires you to look outward, and of course, upward.
Business strategies emerge over time as intentions
collide with & accommodate changing realities
Strategy involves the decisions we make as business owners in four key areas:
- Products and services
- Customers
- Market segments
- Geographic areas
A comprehensive competitive analysis should be a key element that informs your business strategy. Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value to prospective clients. After all, how else can you determine your unique mix of value without looking at others’ mix of value? Without taking this critical step, you’re operating in a vacuum.
A competitive analysis is just one part of an external analysis of your environment. It can range from purposeful conversations with people in your business to reading trade publications to keeping your eyes on trending business news. Check out some other methods on this simple Competitor Analysis Worksheet.
Savvy business owners ask these four competitive questions:
- What is driving your competition and in what direction are they going?
- What are they currently doing? What might they do next?
- What are their beliefs and assumptions about the industry? How are they positioned?
- What are they capable of? What are their strengths and weaknesses?
Consider this, too:
The more intense the rivalry, the more critical it is to understand your competitors. The greater your understanding of your competitors’ actions and responses, the more effectively your business can compete.
Competitive analysis should be frequent and ongoing; it’s not a once-a-year activity. Its primary purpose is to help you find openings in the market you can exploit.
My personal business example:
In 2015 when I was knee-deep in launching a conference, my team and I lost focus on our competition. Well, we’re refocused now (and planning to conduct deep competitor analysis every summer, in addition to having our eye on it all the time) and are getting tremendous value from spending time and energy analyzing where there’s opportunity to carve out a unique niche and how to capitalize on that niche. We can clearly see where our competitors aren’t focused, and where Black Dress Circle will exploit growth opportunities.
Anticipate your competition so you can respond proactively
If you think you don’t have competitors, consider this …
Look critically at your ability to respond to the marketplace; study other businesses in the market who may be trending toward you—you must be proactive and ready for any new competitive threats. By doing a deep analysis of the market, you can devise a strategy in anticipation of any threats that could encroach on your market share.
I hope you can see the ROI potential of these exercises. Whoever you work with to make your business hum at maximum capacity, I challenge you to think beyond your current boundaries! As I often remind my Black Dress Circle roundtable members, it’s easy to get bogged down in the day-to-day minutiae of working in our businesses; it’s the planners who get ahead by working on their business.
Onward,
Erin Joy