Following the competition leads to commodization

If you don’t know your company strategy, try to document it from the direction it has taken over the last 5 years. Even if you do know your current corporate strategy, the reality may be very different (a sign of ineffective communication from the management). Either way, it is time to take a look.

Begin with a list 5 competitors. Answer the following questions to determine if you are a follower or an instigator in your industry…

1.  What products/services have been introduced? Does the competition have the same products/services? Which was introduced first (competitor/you)?
2. What new features have been offered? Does the competition have the same features? Which was introduced first (competitor/you)?

If your competitor offers the same products/services and/or features, you are becoming (or already are) a commodity. When products/services and features are the same (or very similar), price becomes the only real distinction. Price wars, if they haven’t already, will begin which minimizes rather than maximizes your ability to gain market share or make additional profit. You are in a no-win situation.

If your company is in a rut…following the competition…it is time to break out and think of alternate possibilities. This begins with looking at your strategy.

If your competition quickly follows your lead…you are not making significant advances that differenciate yourself.

If you can not answer these questions, it is time to call in your Business Intelligent contact in the IT department. He or she will help you work with your data to uncover the trends and answers to the questions. If the information is not available, he or she will help you initiate a project to fill in the blanks.

You can’t change direction unless you know what direction you have been taking.