Most leaders take a considered view of competition. Some constantly look over their corporate shoulders at what they see as the competition, and others, rightly, leave the competition to worry about them.
It is very curious how some people look at the issue. I recall a discount retailer telling me that unless he was the cheapest in the market, he would lose all his business.
That makes the assumption that the consumer buys only on price and would go from store to store looking for the lowest price. Obviously arrant nonsense.
In another instance a client said the same thing so we checked his competitors’ prices and, what do you think, his were just about median in around 70 companies. What is more the highest priced business was the market leader and had the highest market share.
However, the biggest problem in this online world is what would appear to be the easiest, and that is identifying your competitors.
Take, for example, the largest book retailer in the world (at the time), Barnes and Noble. Easy for them to identify other book retailers, worldwide. Unfortunately they didn’t see Amazon coming. What is worse, they perceived Amazon to be both a shooting star that would burn out and an interloper in a business world that they thought was unchangeable.
People like to browse for books in conventional book shops don’t they, not buy sight unseen from the internet. Sure they do and the book stores offer a handy way to look at a book and then buy online.
More and more this is happening and it is not simply because things are less expensive online. It is not always the case and retailers need to understand that browsing and buying online is fast becoming a national pastime even if it could be construed as being morally reprehensible.
The biggest problem for the established businesses is the competitors emerging from left field, having had nothing to do with the sector in the past and often being completely unknown.
Look again at some of the businesses which have been successfully attacked; Barnes and Noble (and most other book retailers), Kodak, Blockbuster and many more.
The key is to realise that these changes are an opportunity, NOT the competition. They are part of the new world in which we live and we had better understand that they are not going to go away.