If you want to tackle competition, then like a wrestling match, you have to take them one by one. You cannot attack all your competitors at once. This is why you need the competitive ladder.
What is the competitive ladder?
Just like you have a podium where the top winners are ranked, similarly you have the competitive ladder, where all your competitors are ranked on each step of the ladder. Each one of them higher than the other, and the toughest competitor at the top of the ladder.
So, with preparation of this competitive ladder, you know which is the competitor standing first, which one is standing second and which one is third (so on and so forth).
Now once you have the competitive ladder constructed, its time for you to start planning on climbing up the competitive ladder so that you reach the top and defeat all others.
As Rocky Balboa says in creed “One step, one punch, one round at a time”
Beating your competition and moving up the competitive ladder
Step 1) Form the competitive ladder
Obviously, the first step to beating your competition is to form the competitive ladder. For this, you majorly need to consider the direct competition. The reason for this is that measuring the actual business you are losing to indirect competition is difficult. And for business studies, you can form the competitive ladder with direct competitors only.
The best way to determine your competition and their market coverage is to do **market research**. This will let you know which of your competitors is doing what in the market & where they stand in terms of their turnover. Here are the questions you need to ask to form the competitive ladder.
a) How are your competitors doing in the market in terms of sales
b) How are you doing in the market?
c) Who is in front of you and who is behind you when we compare market share.
With this analysis, you will come up with a competitive ladder made of the competitors in your segment.
Before you think of attack, you have to think of defence. If you are already losing market share to your competitors, it is better to first defend your market share and then think of going forward.
There may be many reasons that you are losing your market. Your competitors have a better product portfolio, they might have a better sales force, they might even have a higher brand equity/ Whatever the reasons, if your company is losing market share, then first you need to defend it before thinking of attack
Step 3) Analyse your direct competition
I will not go in detail for this step. Here is an article you can refer on analysing direct competition. In this step, you are in general doing the following
a) Understanding your competition and their core strengths
b) Comparing the competitor’s product portfolio with yourself
c) Finding out ways to fill the gaps left in the market / gain back the market from competitors
Step 4) Should you compete?
Before I tell you to move forward, I would like to ask you one thing – Are you ready for this step?
Taking on a competition requires resources from your end. You will have to be better than him in your finances. You will have to be better in terms of manpower. Most of all, you have to be better in strategy. You need to be ready with your counter attacks when your competitor responds (and he surely will respond)
Secondly, you have to make a choice. You can be a large fish in a small pond or a small fish in a large pond. The challenges of the latter are manifold. If you think you are comfortable being a large fish in a small pond, then, by all means, continue to do so. You don’t need to climb up the ladder if you are at the top of your market.
But if you want to start growing, here are the things you will need.
Step 5) Who are the three above you
Now, we start on chipping off the competitors from the ladder. You need to target the next three competitors if you are pretty far down the ladder. However, if you yourself are 3rd or 4th in the competitive ladder, then we go back to Rocky Balboa “One step, one punch, one round at a time”. The competition in the top 4 is going to be way harder then anywhere below that level.
Here are the things you can do to start the momentum.
- Improve your products – Yes!! The existing ones. Do a product line or product mix analysis and find out what is missing in your product portfolio.
- Plan new products if you have to – Think that there are products missing in your product line, or the product depth should be better? Well, it is your company. You have to plan the product line as per the demand in the market.
- Improve penetration – Get some key account managers / channel executives / sales executives or anyone who can increase the push at the ground level. This push, will in turn, lead to improved penetration for your products. You need to establish strict control measures to ensure the push is happening in the market.
- Advertise / Market – One of the key factors in Marketing is advertising. If you have the profits, then invest a part of the profit in advertising to reach more people and to get more people to adopt your products.
- Do what the competition is NOT doing – The competition is not taking care of their customers? You do that. The competition does not have premium products? You do that. The competition is too premium and market demand is for cheaper products? You do that!!
Step 6) Maintain the momentum
Your competitor will come back at you and he is going to come back hard. He will try to stop you with tactics of his own. He may have deep pockets and might advertise more. He may drop the prices. He may hire even more resources. He will do everything to upset your momentum.
Do a favor to me. Don’t give a damn about your competition at this stage. Do not be daunted by him. Instead, you maintain the momentum you have gained. You might have to adjust somewhat as per the competitor’s response, but that is what business is all about. It is dynamic in nature. But this is where i want your momentum to continue.
And this stage is the one where you need to remember answers to the 3rd and 4th question i asked!!
- Have you analysed your competitors thoroughly
- Are you ready to take them on?
If your answer to both of the above questions was YES, then you dont need to stop. But at this stage, creativity will have its own advantages. Start becoming creative with your placements and marketing. Creativity will bring differentiation, which will get you ahead of competition. So once your competitor reacts,
- Start being creative
- Time to differentiate and beat your competitor
Step 7) Have Patience
The last step is the most difficult of all. Don’t believe me?? Here are some companies fighting since decades
You cannot implement strategies against your competition and think he will not respond, or that you will climb the competitive ladder soon. You need to have patience. Once your defeat your closest competitors, you will have to start again for the ones at the top.
That is how you climb up the competitive ladder – Step by step. The preparation stage is most important where you design the ladder, study yourself and then prepare for the plunge of competition.