Friday, January 11, 2013

Learn from Your Competitors!

What can you learn from your successful competitors? A lot! When you're planning marketing strategy, you should analyze your competitive situation in detail, examining the companies you compete with today and the possible competitors of tomorrow.

When analyzing successful current competitors, ask yourself:
  • What makes them so successful? Apple's expertise in user-friendly design is not just a strength, it's a core competence (built into the firm's DNA and not easily replicable). Now Nokia is trying to take a page from Apple's success story by putting design at the top of its marketing priority list (see its phone at right).
  • What are their strengths and weaknesses? Samsung sees Apple's unified ecosystem as a strength, especially in cloud-based services such as iCloud, and is looking at this from a competitive perspective. On the other hand, as the highly public problems with Apple Maps indicate, sometimes companies overestimate their abilities--which can be a weakness. 
  • What resources and strategies give them momentum? Apple has LOTS of cash on hand. It's been buying back its shares and paying dividends, but still has the formidable financial strength to bankroll any new product and marketing campaign. The Apple Maps debacle is another example of Apple's willingness to yank things from the marketplace after listening to what customers say and watching what they do. It axed Ping, among other offerings, when they failed to catch on. That's a good thing.
  • What can you adapt to compete more effectively? First, think about whether a successful competitor's strength or competence or strategy makes sense for you. Nokia is trying to adapt slick design as a way to compete with Apple; Samsung is looking at Apple's cloud services ecosystem. They're not exactly copying Apple, but taking cues from what Apple does that makes it so successful. Maybe Samsung and Nokia will do well simply because they're trying something new instead of sticking to what made them successful in years past? But this means matching the experiments with opportunities that can be exploited. Apple has proven that customers value good design enough to pay more for it. That's an opportunity for a competitor willing to boldly innovate on the road to earning a reputation as a design leader. Remember, niche competitors are already trying to get a toe-hold in your market, often by building on some idea sparked by a runaway success story in your industry.
My next post will be about analyzing and learning from struggling competitors--and competitors that haven't even become competitors yet.

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