No one really likes to lose. And while ‘a bit of healthy competition’ has been the staple mantra of sports coaches, teachers and parents for decades, it is often a whole different story when it comes to your business. There is an undeniable fear that rival companies will undercut you, steal your clients and poach your star talent.
But it really depends on your outlook. Your competitors do not have to be your enemies – they can be your guinea pigs, your inspiration, or even your allies. Here are a few reasons why you should be glad your company has someone to beat.
1. They will keep you on your toes
Holding a monopoly on a particular market sounds like a dream come true but it is not necessarily a positive thing. When you are the sole provider to a market niche, it is far too easy to get complacent. Without competitors nipping at your heels, you do not have a reason to develop your product, improve your marketing or increase your efficiency – and after a few years of complacency, it is that much harder to step up your game when a new business does finally enter the scene.
In a crowded market, however, you are forced to differentiate yourself if you want to succeed. Comparing your business to another helps you position yourself in that market and you will be able to create and exploit your unique selling proposition.
In the e-commerce industry in Singapore, for example, innovation is a must. According to Flipit, the e-commerce industry is currently valued at S$4.4 billion. But it is also an industry which is affected by the recent labour crunch and rising costs in rental and raw materials. With Singapore set to be the largest e-commerce industry in Southeast Asia, competition is going to be very tough. However, competitors need not be your foe.
2. They’ll groom the market for you
No matter how hard you push your marketing efforts, you cannot reach everyone. But your competitors can help you to fill the gaps. They might not be promoting your company, but they are spending their money to raise public awareness about your industry and its products, educating clients and customers about the benefits of products and services like yours. All you need to do is show them you are better at it.
‘A bit of healthy competition’ becomes even more useful when you are a daring start-up trying something completely unprecedented. Before Airbnb, the idea of staying in a stranger’s house was bizarre – but according to their New York City manager, Wrede Petersmeyer, we should be embracing our competitors. “They are out there convincing who you have not talked to yet that what you are trying to do is not a weird thing”.
3. You can learn from them
For the most part, your competition probably is not stupid. They are hard-working, smart entrepreneurs – just like you – and if they are starting to change how they do things, you had better take notice. If your rivals are adding new features to their products, introducing additional services or targeting different demographics, you really need to find out why. It does not have to be a case of corporate espionage. It could be as simple as a direct, yet careful, sharing of ideas and information, which is why so many businesses are seeing the advantages of using co-working spaces.
But that does not mean you should copy their every move. They will make mistakes, just like you do sometimes, and even if they do not, what works well for them might not be a good fit for you. What is important is that you do not just relish their mistakes: you find out exactly why it did not work out, and apply the same logic to your own business decisions. What did not work for them, may work for you. So keep learning from your competitors and do not be afraid of them.
4. They can create a tribal effect
When you are the only company doing what you do, it is much harder for your team to try and be the best. Ask any sports team who they are going to beat, and they all know the answer: the other guys. You do not have to demonise your rivals until your staff are thirsting for blood, but having a clear competitor to set your standards and goals against can rally your employees towards a common goal.
As a bonus, this innate human tendency towards tribalism is not just limited to your workforce. When two competing companies each have brands with a strong presence, their customers start to rally together in their defence, too.
5. You could one day work together
It’s a well-worn cliché but you really should keep your enemies closer. It is tough for smaller businesses to win big contracts, such as those from governmental bodies. But when smaller businesses can put aside their differences, they can put together their resources, their teams and their creativity to take on more than either one could handle individually.
But remember: these kinds of alliances are likely to be temporary. When the contract ends, you will probably end up going back to the old rivalry, so try not to reveal too many of your best secrets.
- Paul MacAndrew, Country Manager of Regus Singapore -