| Cross Views |
| April 20 2010 14:56:49 |
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"There is nothing in the world that some man cannot make a little worse and sell a little cheaper, and he who considers price only is that man's lawful prey". John Ruskin (1819 - 1900) If you're running a successful business and you're selling a product that plenty of people want to buy, chances are that one day sooner or later someone else will open a similar business nearby and some of your customers will go to them. It stands to reason, its only natural, and no business owner should be surprised when it happens. We all face competition from time to time.
Typically the new competition will be cheaper than you and more aggressive with their marketing. Why? Because having made the decision to start a new business they desperately need to get a firm foothold in your market. It doesn't matter what kind of business you run, aggressive competition will hit you at some time or other, and some of your customers will move because that's how free trade and market forces work. Six things a business owner can do when a cheaper competitor pitches camp on your doorstep and starts blowing its own trumpet for all it is worth:- 1. Don't worry about it. Maybe their efforts will generate new customers for your business as well as for their own. 2. Compete on price. Hmmm. Let's face it, this is only going to work if your business can survive with less profit or fewer overheads - temporarily or permanently - otherwise it's a suicidal strategy. 3. Keep your prices up and compete on quality. Obviously this is only going to work if the quality of your product clearly beats the competition. Not all customers want to buy the cheapest product they can find. Most people understand that good quality is worth paying for. If your own product doesn't pass muster then it's time to invest in your business in order to keep ahead. 4. Diversify. Move into new areas of business where the competition can't - or won't - compete. Bear in mind that you'll inevitably tread on someone else's toes in the process, though, to get your own foothold in their market. What's sauce for the goose is sauce for the gander, as they say. 5. Sell your business to the competition. Why not? If they can afford to buy you out maybe its a good option. If the price is right, you could retire to the Bahamas! 6. Buy the competition. If you have a friendly bank manager, why not? If you really believe in the product why not buy yourself a bigger share of the market? Buy the competition and start your own empire. Care for a cup of tea Mr Branson? Choices like these shouldn't be a big deal for smart business owners. They should be our meat and drink. Fact: if we have a good product we will face competition sooner or later. We must learn to deal with it, be ready and rise to the challenge!
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