Who is our competition and what are they doing?

The last three years have brought significant disruption in many industries. As a result some organizations have experienced robust growth in new sectors and geographies. For others, this year was a wake-up to reduced market share, competitors with startling new business models, and a great deal of questioning how to adapt.
We received many requests in 2011 to help organizations understand their competitive landscape. The requests came from both those organizations who are enjoying strong growth, and those who find themselves in a challenging new reality.

Here are five questions we consider when helping clients evaluate their new landscape:

1. Have customer requirements changed?

The print industry is experiencing a massive change in customer requirements. Flyers, brochures, annual reports – almost every kind of print has declined in demand. For printing companies, it’s not a question of falling behind competitors, it’s a question of customer requirements having completely changed. Printers who saw the change coming have been able to transform their service offerings and maintain customer relationships (and profits).

Have customer requirements changed in your industry? If so, what are the new requirements and what can your organization do to meet those needs? Can you acquire other organizations that align with your service and new customer demands? Can you change your business model? If you can see that your current way of operating isn’t viable 5 years down the road, should you position to exit?

2. Has buying behaviour changed?

Ten years ago, government departments bought via tenders, just as they do now. But the growth in Internet use has brought web portals that announce public contracts, and now all government contracts are offered this way. For companies seeking government work, these sites are compulsory tools to connect with buyers – if they don’t use them, they’re out of the loop, and out of luck.

Has the way that your customers buy your service or product changed? More importantly – has the way your prospects buy changed? Do they search for possible solutions online? Do they use LinkedIn to get recommendations from industry insiders? If the way your prospects identify solutions to their problems has changed, do you need to change your marketing and sales approach too?

3. What are competitors offering?

Web design firms used to thrive on their ability to design visually appealing sites that provided clear navigation. Now it’s more important for web developers to deliver sites that get found (ie, can be found by Google, Bing and the other search engines). Search engine optimization now trumps visual appeal just about every time. Web developers have retooled to offer clients not only good looking sites that are easy to navigate – but sites that get found.

Has your competition changed what they are offering? Are they providing a new service or product set? Are they bundling some products with others? Have they gone to a service model (like SaaS, software as a service) from a project model? Does the change in what the competition offers provide you with new opportunities, or dictate that you change too?

4. What are competitors charging?

The recession put price increases on hold for many industries. Companies held firm on their pricing, knowing that customers wouldn’t accept any increases. But by late last year, circumstances had changed and many businesses were able to pass increases through to their customers.

What are your competitors charging for comparable products and services? Have they held prices to 2008 / 2009 levels, or implemented increases in the last 12 months? Do you have opportunities to increase your prices based on the value you provide?

5. What is your brand perception relative to competitors?

Some professional associations doubled down in the recession, knowing that people would be drawn back to school by the lack of job opportunities, and that they would be looking at technical and professional designations to increase their employability upon graduation. It was a great time for professional associations to grow their brands by increasing investment in marketing and communications.

What was your approach during the recession – did you double down, or hunker down? If your competitors invested in the last several years while you stayed still, have they now achieved a level of brand perception and prestige that you can’t match? What can you do to reposition, or catch up?

These aren’t the only questions that matter in conducting an environmental analysis, but we find they’re the ones that elicit the most profound realizations on what an organization must do to complete in its new reality. If you’d like to know more of the questions companies must answer to gain a clear understanding of their environment, click to connect with Lisa Shepherd or Meredith Low.