Tag Archives: market share

Is Competition Good For Business?

Before we dig too deep into the pros and cons of whether competition is good for business, let’s take a look back about 100 years … give or take a few years.

When Henry Ford started manufacturing automobiles, he wanted to produce vehicles that the “average” person could afford. In doing so, he established a certain loyalty to his brand among the people who bought his cars. That loyalty has spanned generations.

Imagine what it would be like today if Ford had not had any competition in the marketplace. Every car on the road would be a Ford and there would be no question what you would drive. Ford would dictate what color of cars would be available, what features they would have, and most importantly, what you would pay to own one of their vehicles.

We’re not experts in which started first, but General Motors entered the automotive scene as well and competition began. People who drove Chevrolet vehicles were proud of how they looked and performed. It wasn’t long before Ford people gained a disdain for Chevy people, and Chevy owners grew to dislike Ford people.

In the process of competing, both companies grew and expanded the world of motor vehicles in the United States.

The competition was good in that it kept both companies operating, although each saw an erosion in market share. As America’s population grew, the market kept growing, so although each company may have lost market share, the overall market expanded enough to keep both companies in business. Competition opened the door for other car manufacturers to try their hand at taking some of the market share, creating jobs and choices for consumers. Consider your choices for automobiles in today’s market, including the foreign competitors.

Back to the topic at hand. Competition is good for the consumer in that it generally keeps prices lower and options more plentiful. Where it can be detrimental to business is when the business dilutes it’s own market by competing with itself.

An example is orange juice. Orange juice now comes regular, with added calcium, mixed with other fruits such as pineapple, and a few other varieties. The same manufacturers compete against themselves for consumers by offering various choices and, in many cases, the consumer is unaware of the differences, except if it means a higher cost to them.

A business owner needs to understand that, in virtually every situation, there will be competition for the consumer’s money. Your business needs to develop strategies to embrace the competition by knowing how and why your business is different, and minimize the risks of competing against yourself.

A key element is to know your customer. What are their preferences? You may think you know what they want, but do you know – for sure – what they really want from your company and your products and/or services? Why do they, or should they, want to do business with you instead of your competitors? How loyal are they?

In our humble opinion, yes, competition is good for business. It keeps your business on its toes and makes you work harder to stay on top or to gain more market share. To use a comparison, athletes get better when they compete against someone better at their sport. Competition in business makes your business better and is better for the consumer.

Brand Your Work – Work Your Brand

Planning for 2014

Now that it’s less than a month away, it’s time to take a few minutes and think through your business strategies for 2014. If you’ve already done this, take some time to review them and make sure you are going to be on the right track.

First step – What is the right track?

Look at where your business is today and try to project out a year from now. Where would you like to see your business in mid- to late-December 2014? Have sales shown an increase or are they holding steady? Will you be in a growth stage? Transition phase? Or will it be time to think about exit strategies?

The key area to consider is what your consumers want and need. You need to know what the market is asking for, and then be prepared and able to deliver it on a consistent basis. Be on top of industry changes. Know your market. Some communities are a year or two behind on trends, and you need to know where your consumers are in your marketplace. You should be slightly ahead.

Second step – Where are your profit margins?

Remember, you’re in business to make money. Consumers understand that, yet still want a good value at a fair price. They also want to know why you’re different from your competitors so they can rationalize buying form you and remain loyal to your brand. If the margin you’ve been operating on has provided your company with good profitability, consider making changes to increase your margins. Those changes could involve cost reductions, if appropriate. They could mean price increases if the market will bear them, at the potential risk of pushing too far and losing market share.

Third step – How strong is your brand?

If yours is the only barbershop in town, you’ve got a good chance of securing 100% of the market share. It doesn’t mean you have a strong brand if the way you treat customers is like you’re the only place in town where they can get their hair cut. You have a strong brand when your customers love coming in, catching up on the latest gossip, enjoying the experience you provide in cutting their hair, and leaving with a satisfied expression because they know they’ve received a good value for the investment.

There are many variables that you need to think through when it comes to strategizing about your business for 2014: Management, competition, pricing structures, overhead, growth, productivity, marketing (including sales, advertising, and public relations), and finances, among others. Call Brand Irons at (920) 366-6334 if you’d like some help.

Take the time to think things through … then act!

Brand Your Work – Work Your Brand.

Game Plan

A good friend left one professional football team and ended up playing for a different one for a couple of years before he retired. The one he left had a consistent record of making the playoffs, winning championships, and having a waiting list for season tickets.

When he signed on with his new team, he found a locker room full of players more concerned about their paychecks than winning. The team rarely made the playoffs, usually had a losing record, and had a hard time filling the stands on game days. He had come from a totally different environment; a positive, winning environment he wanted to create with his new team, so he needed a game plan.

His approach involved helping his teammates understand that if they put forth the effort to be the best players they could be and concentrate on winning football games, they would fill the stands and generate the revenue necessary to more than compensate them for their efforts. He worked hard on conditioning, talked about the right fuel for the machine, and studied the playbook to perfection. His teammates started to understand, especially that with the right attitude they might even make the playoffs and win a championship, like he had done with his former team. He showed them his championship ring.

While his impact on the team was a small part of their success, they now contend for the division title every year and have made the playoffs consistently for four or five years. He had helped the players think things through, adjust their attitude, and play with a different winning mindset.

What’s the game plan for your business?

You can easily do the least possible and get by. That’s simple. You will own a business and take an occasional paycheck. Your company may be remembered one day for providing a product or service that people enjoyed while it lasted. You may even have an impact on some people’s lives. Is that your legacy and game strategy? Is that why you are in business? Is it enough for you to accomplish?

Or …

Do you want to create, develop, and sustain a comprehensive strategy that builds your brand to have top-of-mind awareness among consumers and own the market for your product or service? You can work your brand to the point where it has phenomenal impact on whatever plane you wish to dominate, including net profit, market share, employee relations, customer service, and public perception. It can be done.

Your strategy starts with your attitude. Answer the question: Why are you in business? Then build on that response by surrounding yourself with the right coaches (consultants such as Brand Irons) and players (employees and vendors). Understand what you’re selling and who your target audience is so they’re willing to buy tickets (purchase your products or services) and come to the games (become repeat customers).

You choose whether your business is mediocre or exceptional.

I go to a certain grocery store for a reason; it’s my favorite. I could buy food at a store where the prices are cheaper, but I go where I do because the owner/manager will stop and talk to me whenever and wherever I am in the store. He and his staff understand the relationship with the customer is more important than stocking the shelves. It makes a difference.

A game plan is a fun way to look at your company’s business plan and market strategy. Contact Brand Irons to get help putting yours together.