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Entrepreneur

Turning “What Ifs” into “Can Dos”

By Tom Irmen

I frequently engage in “what if” conversations with our advertising partners, where we debate the impact on our own small businesses if we were to adopt the business model of a competitor. Frequently, these competitors have introduced a business model that appears compelling – one that might gain traction, resulting in a competitive advantage.

New ideas and initiatives designed to enhance a business’s value proposition can come from many sources, including our competitors. Many entrepreneurs are quick to dismiss a competitor’s business model, justifying instead why their own business model is superior.

I witnessed firsthand how the senior executives of one Fortune 500 company summarily dismiss the competitive threat of a new competitive product called “stretch wrap.” Dismissed as a “flash in the pan,” their decision to ignore reality cost them and many hundreds, perhaps thousands, of their devoted employees their jobs. By the time they accepted their new marketplace reality, the die had been cast, relegating them to the bottom ring on the competitive ladder.

Carefully consider your competition’s business model, examining the potential for adopting, and perhaps improving upon, a competitive initiative that will help you advance your company’s value proposition in the minds and eyes of both your existing and prospective customers.

When we first launched our companion publication, East Tennessee’s Mountain Views, we carefully evaluated our competition’s business models and in turn offered advertisers and readers a much greater perceived value than that offered by our competitors. During the early months, we continued to refine our evolving business to gain even further competitive advantages, and in less than one year’s time, we earned the dominant market position. An established company with 10+ years of marketplace experience, our principal competitor ignored early warning signs and failed to act. My best estimate is that they lost well over 50% of their advertising revenue in just the first year alone.

Don’t ignore your competition.

It’s disheartening to lose a customer to a competitor. But rather than to attack your former customer’s loyalty, your time would be better invested in understanding why your customer chose your competitor instead of you.

If your competition offers a perceived value greater than that offered by your small business, act. Don’t just adopt your competitor’s perceived advantages – improve on them, and then thank them for making you better and providing your customers with a product or service of far greater perceived value.

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