Most businesses take years to establish themselves in an industry — if they ever even manage it.
A few inspiring cases of companies going from dream to reality in six months are out there, and those generally have a few things in common. The classic why-didn’t-I-think-of-that cliche of creative problem solving certainly exists, but a well-developed business plan of some sort also comes into play.
In that plan should be a competitive analysis, which Jeff Haden helps us develop in his How to Write a Great Business Plan series from Inc.
We’re supposed to be able to answer how our competitors will react when we enter the market. I exactly don’t understand how we’re supposed to know that. One way would be to look at their history to see what happened when new competitors entered their market. And a look even further back into how they got into the market and how their pre-existing competitors reacted would also be beneficial. Even then, if we’re looking to start a business and compete against established businesses, we need to be doing something better than anyone has before. And if we do that, it’ll be a wild card for those competitors and we can’t guarantee how they’ll react.
At the same time, we’re also supposed to be considering how we’d react when a new competitor enters the market. And this is a good consideration to be making. Based on our readings this far, this is also a good consideration to keep making as long as the business is running. The idea would be that any little weakness that a competitor could exploit needs to be shut down. If we can think like our own competitors and analyze opportunities that aren’t being capitalized on, this will both improve our business and prepare us for when new competitors try to strut on our turf.
Haden writes that we need to “learn from competitor strengths, take advantage of competitor’s weaknesses, and apply the same analysis to your own business plan.”
It made me think of Apple immediately, even though Steve Jobs said something about giving the consumer what they don’t even realize they want/need. Apple didn’t have to be the first ones to make a smartwatch, they just had to do it in a better way. I know the Android vs Apple battle is subjective, but I certainly didn’t see nearly as many smartwatches being worn before the Apple smartwatch came out. There are plenty of other examples out there, especially in any consumer goods market, where we can see living proof of those who don’t do things first, they simply do things better.
In the end, that’s what the competitive analysis helps us work towards. If we can’t be first, then we need to figure out how to do things better than anyone else.