What should you do when you discover that another business is trying to eat into your profit margins?
In the world of business, whenever you come up with a great product or service, you can be certain that at one point, you’ll have to deal with copycats. Although copycats are rarely successful in the long run, they are likely to take a piece of the pie in the market, especially when you didn’t have an action plan from the very onset of your business. To stay afloat amidst fierce competition, here is an action plan to implement.
You’ll need to constantly evaluate competition and conduct a SWOT analysis
With the help of competitor monitoring software, you can easily understand the competitive landscape. Conducting a competitor analysis will help you understand three critical things about your business as follows:
- Identifying direct, indirect, and future competition
- A deep understanding of your market share and where your products stand on the market
- Understanding your strengths, weaknesses, and possible loopholes you need to seal
A SWOT analysis
A strengths, weaknesses, opportunities, and threats (SWOT) analysis is a technique businesses use to determine their strengths, weaknesses, external opportunities, and threats. While the strengths and weaknesses are internal, threats and opportunities are external.
Conducting a SWOT analysis will help you uncover opportunities you can naturally exploit, given your particular strengths (competitive advantages). By understanding your business’ weaknesses, you can seal the loopholes to ward off threats. Additionally, a SWOT analysis helps you craft strategies that distinguish you from competitors.
Legally protect your products and ideas
Copycats always latch onto whatever is monetizable. You can’t underestimate them. That’s why you need to protect your brand in the first place. To protect your business and products, you need legal protection. You need product patents, patents on ideas, non-disclosure agreements for your employees, and trademarks, all depending on your type of business. A patent, for example, allows you to warn off competition, allowing you to enjoy exclusive rights to exploit your invention commercially.
Gathering customer information should be a continuous process
Many businesses will go the extra mile to get acquainted with customers and identify their needs. Then they will come up with products to satisfy those needs. Unfortunately, as soon as they get business, they stop learning more about their customers. This creates gaps that copycats will happily take advantage of. You constantly need to know what’s happening to your customers, what new problems they are facing, what are their opportunities, and so on. You can do this by collecting consumer feedback and data in an unobtrusive way.
When collecting data, make it less annoying
A great way to make it less annoying is to collect data bit by bit from the orders customers place and incentivized surveys. You can also analyze demographic-related reports and spot trends. Within an industry, it’s almost certain that other businesses are targeting similar demographics as you. Looking at existing research can help you keep up with consumer trends.
While competition in business is inevitable, it’s not the competition that kills most businesses. It’s usually the inability of businesses to put on blinders and shut off the noise from copycats. When you have a good plan in place, you can concentrate on building a brand that can withstand aggressive competition.