-->

Your Competitive Environment

Environmental Awareness
Alert, awake, and prepared to respond to normal or unusual stimuli in an appropriate manner is an indicator to ourselves and to others as to how aware we are of our environment. Often times our peers and co-workers will “test” our knowledge of current events and highly controversial topics; this test is not necessarily for the sake of testing but in the interest of holding a conversation. However, the resulting analysis and mental printout from that conversation is what will inevitably be shared with that peer’s family, friends, and co-workers. Was this an average conversation = no need to report, abnormally arduous conversation = report negative, or an incredibly fun and enlightening conversation = report positive. We are humans, social animals, and therefore, we share our experiences; it’s a normal expected occurrence.

It is this same vein of thought that business owners must be vigilant about maintaining an awareness of their company’s environment.

SEE: Your Core Discovery

Competitive Analysis
As part of the initial business plan most business owners complete a thorough analysis of their company’s environment. They know who their competitors are and they have carved out their niche in the market based upon the analysis. However, as the rigors of running a business set in, finding the time and objectivity becomes the obstacle to completing an appropriate and comprehensive analysis.

Our competitive environment is constantly changing so, if you operate based on stale information you may actually work against your cause - giving your competition the advantage.

Trend Identification
Maintaining awareness of your company’s environment on a regular monthly, quarterly, and annual basis helps the business owner to identify relevant changes in trends as well as emerging trends. Especially in turbulent economic times and times of uncertainty proactive monitoring enables proactive action and decision making versus reactive emergency response.

Identification of macro and micro level trends specific to your company’s environment is valuable no matter the size of the business. Also, you may find a slight edge over the competitor that lacks relevant competitive intelligence.

SEE: Integrated Marketing Part I

Demographics
Much like competition, demographics are constantly changing. Not necessarily every year; however, you never know when a significant shift will occur unless you monitor your landscape.

Composed of age, gender, race, employment level, salary level, education level, location, home ownership, and consideration of factors that impact your company’s demographics such as births, deaths, and area industry concentrations - there are a lot of moving parts. However, monitoring is crucial to the planning process. Noting significant shifts in demographics and any correlations to preferences helps the business owner to determine when perhaps increasing product B is more appealing in the coming year versus product A.

Strategic Direction
All of the aforementioned factors help to ensure that your business maintains an attuned strategic direction. How can you possibly know how many units you can expect to sell without having a real sense of your market? What happened last year is not sufficient for projecting this year’s growth, shifts, and revenue. Is there increased competition? Is there readily available market share due to the exit of a competitor? Is there a market opportunity due to the increased buying power of a market segment? Are you in position to capitalize? Or has the industry experienced a reduced barrier to entry that could threaten your market share?

These are not difficult questions. They are simply the questions we ask of our business peers to gauge their degree of environmental awareness.

SEE: Competitive Analysis

About the Author

Maisha Smart, MBA founded Finance and Marketing to help small businesses excel, by bridging the gap between finance and marketing processes. Some of her favorite activities include fine arts, a good debate, and social engagement.

Fan on Facebook | Find on Pinterest | Follow on Twitter | Add to Circles


No comments:

Post a Comment