Competition - Death Knell Or Dinner Bell
Some entrepreneurs believe you should run from competition; others believe you should run toward it.
A few misguided souls believe that their idea is so unique, compelling and curb-jumping that competition will never be a factor.
What can be said of competition that is entirely true? Is it the death knell or the dinner bell? Truth: Competition is a fact of life, particularly on the Internet.
If you read a business plan in which the entrepreneur claims an absence of competition, either he is completely wrong, utterly stupid, or both.
In any case, deposit that plan in the nearest open receptacle.
Between a surprising dearth of competition and a crushing abundance of it, lies the fertile ground where entrepreneurs get to prove their mettle every day.
To the extent they learn to embrace it, maneuver around it, neutralize or manage it, they will be successful, profitable and sustainable.
David Silverman has been an entrepreneur, an executive, and a business writer for the Harvard Business Review.
Speaking of entrepreneur wannabes, he once commented in an article that: "Competition, clearly, scares people.
It scares them so much that they are afraid of a third-party (me) daring to upset their closely held belief that if someone, somewhere, is (or has) done something remotely similar, then it's best to go back to my day job cubicle.
"It's been done," they tell me.
"Give it up.
" Silverman continues, "My response: How many places sell hamburgers? Consider the Shake Shack in Union Square Park in New York City.
It's in sight of 2 McDonald's, 10 lunch counters, and a minute walk from nearly a hundred restaurants.
However, since they opened in 2004, the line stretches out of the park every lunch time.
" So what's the secret? How does a street-smart business owner embrace, maneuver around, neutralize or manage the competition? EMBRACE: The key here is to know they exist, study them deeply, recognize their points of vulnerability, and capitalize on their weaknesses.
Develop a coherent strategic plan, and then work it.
If all else fails, and they cannot be overwhelmed, learn to share the market or joint venture with them.
Always remain poised, exhibit equanimity under pressure, conduct yourself professionally and your skills will eventually rise to the top.
MANEUVER AROUND: If you find yourself in "shark-infested waters" don't run for the beach, learn to swim in a slightly different way.
Specialize, find a niche without sharks, or find a lifeguard.
For example: Many years ago when I was a Senior Vice President at AIG Marketing, I was in charge of Voluntary Employee Insurance Plans worldwide.
It was a very crowded market, and countless sales reps were swimming with all the other sharks from other companies.
They congregated eight deep in front of every employee benefits manager, competing on price.
My solution was to specialize, find a niche without sharks, and find a lifeguard.
I developed a product and marketing approach that was completely unique (specialized), found a way to present to C-level executives only (a niche without sharks), and partnered with a powerful and respected gate-keeper (lifeguard).
The competition was just as strong, but out maneuvered.
NEUTRALIZE AND MANAGE: In most cases, this is primarily a question of market selection.
Everything else being equal, if results are the primary concern, solid effectiveness may trump mere efficiency.
If you are selling potatoes to supermarkets, price might be most important.
Conversely, if you are selling plasma screen televisions to videophiles, quality might be more important than price.
In my industry, a very common competitive situation is the intense struggle over price.
With the advent of burgeoning technology businesses in eastern Europe and Asia, particularly India, and the great financial disparity between doing business there and here, every U.
S.
provider is at a cost disadvantage.
In some cases that is an insurmountable obstacle.
However, not always.
Seasoned businessmen recognize that quality often trumps price.
If you are in the market for a Mercedes, you don't expect a Chevrolet sticker.
If what's at stake is your business, you are going to hire the best, not necessarily the cheapest.
To neutralize and manage the competition, you need to be remarkable and memorable, with obvious valued-added to the mix.
The truth about competition is that it is neither the death knell nor the dinner bell: It is the starting bell.
A few misguided souls believe that their idea is so unique, compelling and curb-jumping that competition will never be a factor.
What can be said of competition that is entirely true? Is it the death knell or the dinner bell? Truth: Competition is a fact of life, particularly on the Internet.
If you read a business plan in which the entrepreneur claims an absence of competition, either he is completely wrong, utterly stupid, or both.
In any case, deposit that plan in the nearest open receptacle.
Between a surprising dearth of competition and a crushing abundance of it, lies the fertile ground where entrepreneurs get to prove their mettle every day.
To the extent they learn to embrace it, maneuver around it, neutralize or manage it, they will be successful, profitable and sustainable.
David Silverman has been an entrepreneur, an executive, and a business writer for the Harvard Business Review.
Speaking of entrepreneur wannabes, he once commented in an article that: "Competition, clearly, scares people.
It scares them so much that they are afraid of a third-party (me) daring to upset their closely held belief that if someone, somewhere, is (or has) done something remotely similar, then it's best to go back to my day job cubicle.
"It's been done," they tell me.
"Give it up.
" Silverman continues, "My response: How many places sell hamburgers? Consider the Shake Shack in Union Square Park in New York City.
It's in sight of 2 McDonald's, 10 lunch counters, and a minute walk from nearly a hundred restaurants.
However, since they opened in 2004, the line stretches out of the park every lunch time.
" So what's the secret? How does a street-smart business owner embrace, maneuver around, neutralize or manage the competition? EMBRACE: The key here is to know they exist, study them deeply, recognize their points of vulnerability, and capitalize on their weaknesses.
Develop a coherent strategic plan, and then work it.
If all else fails, and they cannot be overwhelmed, learn to share the market or joint venture with them.
Always remain poised, exhibit equanimity under pressure, conduct yourself professionally and your skills will eventually rise to the top.
MANEUVER AROUND: If you find yourself in "shark-infested waters" don't run for the beach, learn to swim in a slightly different way.
Specialize, find a niche without sharks, or find a lifeguard.
For example: Many years ago when I was a Senior Vice President at AIG Marketing, I was in charge of Voluntary Employee Insurance Plans worldwide.
It was a very crowded market, and countless sales reps were swimming with all the other sharks from other companies.
They congregated eight deep in front of every employee benefits manager, competing on price.
My solution was to specialize, find a niche without sharks, and find a lifeguard.
I developed a product and marketing approach that was completely unique (specialized), found a way to present to C-level executives only (a niche without sharks), and partnered with a powerful and respected gate-keeper (lifeguard).
The competition was just as strong, but out maneuvered.
NEUTRALIZE AND MANAGE: In most cases, this is primarily a question of market selection.
Everything else being equal, if results are the primary concern, solid effectiveness may trump mere efficiency.
If you are selling potatoes to supermarkets, price might be most important.
Conversely, if you are selling plasma screen televisions to videophiles, quality might be more important than price.
In my industry, a very common competitive situation is the intense struggle over price.
With the advent of burgeoning technology businesses in eastern Europe and Asia, particularly India, and the great financial disparity between doing business there and here, every U.
S.
provider is at a cost disadvantage.
In some cases that is an insurmountable obstacle.
However, not always.
Seasoned businessmen recognize that quality often trumps price.
If you are in the market for a Mercedes, you don't expect a Chevrolet sticker.
If what's at stake is your business, you are going to hire the best, not necessarily the cheapest.
To neutralize and manage the competition, you need to be remarkable and memorable, with obvious valued-added to the mix.
The truth about competition is that it is neither the death knell nor the dinner bell: It is the starting bell.
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