Rapidly increasing population, changing customer demands, and expanding markets are opening new avenues for more businesses. Therefore, thousands of new startups enter the market every year. According to an estimate by SBA, entrepreneurs launch around 627,000 new companies in the market every year. It means more and more competition and rivalry in the markets. Precisely what we have been observing for some time now. Markets are getting saturated, and businesses are fighting for a higher market share and customer base.
Several brands are available in the market to cater to customers varying needs in the best way possible. And consumer personalization is at its peak in current times. According to a report by startup bonsai, 80% of customers prefer businesses that provide more personalization to their choice. Therefore, companies are now studying the customer comprehensively and then creating their unique selling points. It also intensifies the competition.
Monitoring competition has become inevitable to survive in the current markets. You can learn various things from their mistakes and utilize your strengths better. Your strategy, plan, and policy all depend on the existing competition. Competitors determine how your business will survive and react to changing market dynamics. Therefore, monitoring the competitors yields essential insights.
This article further discusses why monitoring competitors is crucial for business success.
Refining Your Strategy
Business, especially in the current environment, requires proper back-end planning and strategizing. However, market dynamics are constantly evolving. Therefore, every company must upgrade and alter its strategy with time. Even formal business education like online MBA no GMAT focuses on teaching competitive analysis to business enthusiasts. It explains why this online MBA program has rapidly grown in popularity among business students. They learn to master market research tools like SWOT, PESTEL, or Porter’s Five Forces to analyze the competitors carefully.
According to a report by SmallBiz Trends, 94% of global businesses are actively investing in competitive intelligence. It shows how vital monitoring the competitors is even on the Global spectrum. Your competitor is your rival in the market. Both of you are fighting for the same customer share. A close eye on your competitors’ moves will provide the basis for making crucial tweaks to your existing strategy.
Adjusting to External Shocks
Market dynamics are constantly changing as new competitors are creating disruptions in the existing business streams. These disruptions are the reason for challenging external shocks for businesses. Since competition is among the leading sources of such shocks, accurately monitoring them earlier can save you from them.
According to UNCTAD, the Covid-19 pandemic has caused a staggering loss of about 4 trillion dollars to the global economy. Well, that is a substantial economic shock for any business around the globe. Even during such testing times, organizations shifted to their contingency plans. Only those who had a thorough understanding of their competition devised their response strategically. They can expose the competition to its weaknesses while fully capitalizing on its strengths.
Exploring the Markets
Monitoring competition certainly involves closely analyzing their market offerings and their customer base. If done correctly, it can provide you valuable market insights. It will show you the available gaps in the market. It will tell you where your competition is lacking to capitalize in the market. You can explore those segments of the market and gain sustainable customer traction.
Southwest Airlines is one of the best examples for monitoring competition and then exploring the untapped market potential. They recognized where the rival was not strong and capitalized on those market opportunities. Soon they became the airline to serve the largest number of passengers by volume in the US. Their short-haul flight strategy, focus on metro areas, and outstanding customer service made them a market leader reasonably soon. And the competitors lacked in these competitive areas.
Incorporating Innovation
Your business can never be innovative if it remains in isolation. You must read and observe your competitors very carefully to incorporate a creative change in your business machinery. It will differentiate your market offering and attract more customers. Moreover, technology is exponentially increasing its role in business operations. You must carefully determine what your competitors are implementing and actively bring about the same innovative changes in your business.
According to a survey by McKinsey, 84% of business executives believe that innovation is critical to sustaining their business in the future. The biggest driver for adopting innovation and creativity is gaining a lead on competitors. Therefore, monitoring them timely will provide necessary insights and incentives to implement innovative solutions. It will provide more unique selling points for your market offerings, which will naturally increase your competitive edge.
Optimizing Business Operations
Inappropriately optimized business operations can cause a lot of harm to the business’s profitability and sustainability. Different business functions and operations require heavy capital and operational expense. Therefore, everyone is always trying to optimize them to the fullest. The competitors might have optimized and adopted better tools than you.
Therefore, monitoring the competitors will present their strategic decisions before you. You can observe them and then take up better options for business operations that can save your time and cost and enhance your profitability. Different supply chain, logistics, and warehousing options are available in the market. Your competitors might have built a better combination. You can certainly learn from them and upgrade your business operations.
Final Thoughts
Trying to remove competition in an industry or sector is impossible as there will always be competition. The way to success is by dealing with it and devising the right strategy to tackle it. The very first step in designing such a competitive strategy is monitoring the competition. There are significant advantages of knowing what your competition is doing. So, ensure to keep an eye on your rivals for unprecedented business success.
Also Read- Tips to Stay on Top of Current Business Trends