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Sharpen your competitive advantage so you can outperform your competition - it's the essence of a sound business strategy. And what's the key to honing that advantage? Knowledge.

Compare yourself in the business arena to the game of tennis. You could play tennis alone by hitting a ball against a wall, to learn your strengths and weaknesses and improve your game. But competition doesn't start until you have an opponent. When you do play against an opponent, you would certainly assess their abilities, skills and methods of play. So it is with the game of business . . . no one plays alone. The more you know about yourself, your competitor and the entire market, the easier it will be for you to be successful and win the competitive advantage.


Know Your Competition
Understanding your competition is an essential part of the process of understanding the marketplace.
  • What makes your competition stand out?
  • What is their market share?
  • How strong is their financial position?
  • How does the market perceive their product or service quality?
  • Who are their customers?
  • What is their game plan?
  • How does their strategy interact with yours?


Know Thyself
Once you have analyzed your competition, you can assess your own strengths and weaknesses in relation it. In addition to the questions you asked about your competition,

  • What makes your stand out in the marketplace?
  • Where do your products or services stand within the market?
  • How do define your vulnerabilities?
  • What corrective measures can you implement?


Know the Market
Once you have defined the competition and your own business analyze the market and locate gaps into which your business would fit. Will you be able to capture a large enough slice of your market pie? Knowing the marketplace will help you carry out your strategies and achieve your goals: Your goals can be realized when you:

  • Supply the right products and services
  • Secure adequate financing
  • Develop appropriate plans
  • Implement your plans
  • Monitor results


Information Sources
If knowledge is so important, where do you find it? Some valuable sources of information to assist you in your goal setting and market strategy include:

  • Publicly filed reports
  • Trade and industry associations
  • Indexes and directories Business and trade publications Computer databases
  • Primary and secondary market research Input from common customers and suppliers
  • Competitor's sales force, employees and former employees
  • The Internet
  • Consultants

The Internet is a relatively new, and increasingly important, source of business information. Many companies have their own sites on the World Wide Web, which offer a wealth of specific information. Industry organizations and trade groups are also represented well on the Web. Many business and trade publications, as well as newspapers, provide Internet versions as well, some of which provide more information than is available in the paper version. Providing instant access and up-to-the-minute data, the Internet is an excellent source of timely information.

A consultant can also be valuable. He or she can provide a combination of the best features of computer data bases, market research interviews and clipping services, and just as importantly, interpret the data as it relates to your individual situation. A consultant serves the role of tennis pro, and can be of prime importance when you are seeking information about your market and your place within it.


Using Your Knowledge
Once you have analyzed your own business, the competition and the marketplace, you can make informed decisions about the future of your business - how to play the game. Will you take an offensive or defensive stand? Or, perhaps, both are appropriate at different times. Will you be a pioneer and an innovator? Or will you follow and learn from a competitor's experiences with a new product in the marketplace?

However, information is only beneficial if you're willing to take advantage of it. Unfortunately, business owners and managers often do not use the market and competitive information they receive. Investors in your business undoubtedly have analyzed your competition and the market as well as your business. You'll meet them on an even playing field if your research is just as thorough. And you can bet the competition is investigating your business, just as you have examined theirs. The advantage will be theirs if you don't use the information you've gained.

As Peter Drucker once said, "Hit them where they ain't." That's exactly what you would do on the tennis court to keep your opponent off balance. So in business, use your hard-won knowledge to position your products or services within the marketplace where your competition ain't. Then you win the match.

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