Sharpen Your Company’s Competitor Analysis
37 Signals imparts 5 interesting business lessons from the CEO of online store, Costco. One particular lesson that caught my attention highlights the importance of customers over competition.
But it is the customer, more than the competition, that keeps Mr. Sinegal’s attention. “The traditional retailer will say: ‘I’m selling this for $10. I wonder whether I can get $10.50 or $11.’ We say: ‘We’re selling it for $9. How do we get it down to $8?’ We understand that our members don’t come and shop with us because of the fancy window displays or the Santa Claus or the piano player. They come and shop with us because we offer great values.”
While I agree on this aspect, it does not mean that you must take it easy on your competitor analysis. It reminds me of a famous quote from Sun Tzu in the Art of War:
Know your enemy and know yourself; in a hundred battles, you will never be defeated. When you are ignorant of the enemy but know yourself, your chances of winning or losing are equal.
Competitors serve as benchmark of your performance. If you do not compare your business with other players, you will miss the chance to improve your operations and attract more customers.
To elaborate further on this rather important aspect, Online Marketing Elite explains why you need to develop competitor analysis for your business plan.
