Know-How Exchange : Strategy

You're right, it wasn't clear.

I'm guessing, but I think your question is two-fold:

1. "Why do I need to know my competition?"

- then -

2. Once I understand my competition, what do I do with that information to help me plan my own business?"

1. You need to know about your market. That means you must understand the environment, the customers, and the existing players (your competition). It's important to understand why you customers buy (at all), why they may buy from your competition, and why they may buy from you. There could be many reasons, product/service quality, price, location, availability, advertising, image, and so on.

2. You need to understand what special attributes are possessed by competitors, so you can compete with them. If you decide to go to the market with, say, "Dzongo-Cola", you better have a great tasting product, enormous advertising budget, fantastic distribution, and so on, because the competitors have all that, already.

Above all, you must find some special way to differentiate your business from your competitors. Merely going to the market and saying you can do all the same things they can do, will not help. You need to be betterfastercheaper or more...

Now tell us what kind of business you are planning, who are your competitors, and why you think you can compete with them.


ChrisB

The key for an effective strategy is to address 4 areas:
1. Maximize your product or company strengths - what do you do or what can you do better than others. What problems can you solve for your customers?
2. Understand your weaknesses and what can be done about them
3. How can you take advantage of opportunities that exist
4. What threats are presented by competition, changes to your marketplace, and more.
Vital input for this process is understanding your competition and their products. Often what may appear as a weakness or threat can be turned into a competitive advantage. For example, you are local and have a deep understanding of your customers needs and purchasing habits. Multinationals have difficulty at the local level - all they offer is the prestige of using a name brand. For your success, combine local knowledge with having a brand to provides that prestige.