Is my competitor a positive or a threat?

15 June 2006
Is my competitor a positive or a threat?
A good competitor is opening near me. Should I see this as a positive, or as a threat? Ann Elliott, Elliott Independent Most conventional wisdom would tell you that competition is good for you. It can be - but only if it helps you raise your game. A good competitor could easily take 20% or more off your sales within weeks. If it has done its homework it will know your strengths and weaknesses and the opportunities it can exploit. If it's really good, it will have been studying you and will know who your customers are and what they like and don't like about you. It will know your trading patterns and where it can take your trade. It will have studied your menu and pricing and will have had a stab at understanding your margins. It may have spoken to your suppliers. It could even have its eyes on your best team members. It could have a big-bang launch and market the business very well locally in the first few vital months of trading. It all depends on how aggressive it wants to be. I don't say all this to scare you, but to ensure you don't become complacent. Now is the time to look anew at your business, refresh your business plan and put it into action. - Analyse your business performance over the last few years. Where could you be doing better? - Look at your business through a fresh pair of (customer) eyes. Take a journey with your customers. Where could you be doing better? Ask them, and ask your staff. - Is the exterior of your building in first class order? - Is your offer, in terms of food and drink, appealing? - Is your team outstanding all the time? - Is your ambience right in every part of the day? Use your competitor's opening to give your business a boost. You could find it's really no threat at all.]( Carl May, Catered4 There are always two sides to every coin, but if you're truly committed to your business it has to be a positive thing. In many city centres, restaurants and bars are grouped together to create a destination for great dining. Ludlow in Shropshire has proved this, and has seen a tremendous growth of fine restaurants, all within a stone's throw of each other. However, don't sit back and do nothing, thinking it won't affect you. Take a close look at your own business with a fresh pair of eyes, or seek the opinions of an outside professional. - What are your unique selling points and how can you modify them and keep all aspects of your business feeling fresh - How long have you been running the same menu? - Why not implement all those little marketing ideas you have. - Find out what style and price range the new competitor is offering, but don't fall into the trap of changing your product offer to match it - use the information as a guideline. - Introduce yourself to your competitor. It's probably just as concerned about you as you are about it, but you have the advantage of being established. - If you have any doubts about your product, seek some help. - No doubt your rival will have an advertising campaign, so why not get in first and advertise your new summer menus, etc? Try small but regular advertising as this is more effective. As long as you're convinced that you're offering the best your staff and business can, then think positive. []( Paul Davey, Davey and Co While you should never dismiss or underestimate the damage a strong competitor can have on your business, you must consider the advantages a "good" competitor can have. Your competitor obviously recognises the potential in your immediate location and market. Competition keeps us on our toes, prevents complacency, and focuses our minds on the relative strengths and weaknesses of our own business's offering to our markets - and it's a ready source of both good new ideas and more customers. It's imperative to seize and retain the initiative - if you don't, you'll be forever playing catch-up. Whatever the competition is doing elsewhere is a good indication of what it intends to do near you - style of operation, menu content, pricing, level of service, quality of offering as a whole. The advantage you have is that you're already there. You should know the tastes, likes, dislikes and pockets of your customers. Your competitor is either going for your existing customers, your potential customers, or most probably both, so be prepared. Look at your operation closely, and not just in relation to this competitor. Make your own SWOT (strengths, weaknesses, opportunities, threats) analysis. Identify areas requiring improvement, your financial performance in particular, including your gross profit margins, all aspects of your overheads, pinpointing areas requiring investment and those requiring the reins to be pulled in. This competitor should act as a catalyst for you to inject your business with renewed enthusiasm, a rigorous reassessment and fresh impetus. And remember that competitors bring in more potential customers through their marketing and reputation. Bring it on! [
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