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Know The Competition – A Key to Gaining Market Advantage

Competition in the marketplace is as common as vanilla ice cream in the summer.  We are trained in school that you must compete in order to win.  How you compete and what strategy you use to win is important.  In sports this is apparent.  Teams will study their foes past performance in preparation for the big game.  Weaknesses will be uncovered and opportunities will be defined. 

In a business climate studying the competition is equally important.  To use an example, Benedictine’s online Master of Business Administration (MBA) capstone class uses the Business Strategy Game (BSG).  I reviewed BSG in a previous blog but want to focus on the competitive piece of the simulation. The intent of the simulation is to allow graduate students to pull the right business “levers” when running a business. The simulation requires decisions be made in an attempt to meet or beat shareholder value.  Teams formulate a strategy such as low cost or differentiation.  But the teams must also anticipate what other teams (the competition) will do in future simulation rounds. 

This is the beauty of the simulation. As in the real business world knowing the competition’s past moves is important.  There are various BSG market reports each team may review following each simulation to anticipate future decisions. These decisions may affect pricing, channels of distribution, operations, etc.   Sound familiar? Being able to predict what the competition will do in the future and applying an appropriate counter strategy is fundamental to gaining market share and winning the simulation.

The same holds true in today’s businesses.  To study the competition and anticipate their next moves is a necessity.  Simply looking at their historical performance is not nearly enough.  After all, have you ever been able to drive a car looking through the rear view mirror? You must look ahead to the future. Where do you see your competition heading, what new products will be introduced, where will new markets be pursued?  All of these future adjustments by the competition are important for your business to know.  Once you have a grasp of the competition your firm will need a way to outperform your competition or defensively posture your organization to prevent losing market share.

As I share with my students throughout the simulation they must be mindful of the other team’s strategies.  Working in a vacuum will not enable you to gain above average results.  Assessing the competition to predict future decisions will solidify your position in the marketplace.  After all, your competition is pulling the same “levers” you are in response to your business strategy!

Gain Your Competitive Edge

If you are interested in learning strategies to assess and address the competition, check out Benedictine’s online MBA program.

About the Author

Pete Papantos is an operations director at a Fortune 500 company.  He is responsible for the global execution of their strategic plan and driving operational excellence using lean methods.  In addition, Pete is a graduate instructor with emphasis in operations and strategic management — both in traditional and online settings.