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Michelle McQuaid
Smarter Writer

Michelle McQuaid is a business productivity coach and author. She contributes regularly to The Huffington Post and Psychology Today

Michelle McQuaid
Smarter Writer

Michelle McQuaid is a business productivity coach and author. She contributes regularly to The Huffington Post and Psychology Today

Researching your market before launching a business is a must-do, but how well do you know the niches within your industry? Read on to find out why you must keep rethinking your customers’ needs to stay ahead of your competitors.

Before you launched your business you may have consulted a bunch of research resources: industry directories, Yellowpages.com.au, local business directories, trade or professional association websites, industry reports and competitor websites.

Fast forward five years and there’s some good news and some bad news. The good news is you’ve made it to five years! Congratulations. The bad news is you might be out of touch with some of the market forces at play.

It’s not sensible to down-play existing or potential competitors in a business plan. The fact you have any competition signals a viable market for you to operate in. If the business (idea) is genuine then competition will be attracted to it. This includes firms that offer similar services or substitute products and further customer options.

cycle customer needs competitors stay ahead

Sleuth out what your competitors are up to

Business plans must identify direct and, when applicable, indirect competitors.

Direct competitors are those that serve the same target market with similar products and services.

Indirect competitors are those that serve the same target market with different products and services, or a different target market with similar products and services.

Let’s assume you’ve launched an accounting software package. Five years ago it had several innovative features that may have given you a competitive edge to attract customers.

Recent development in Cloud-based accounting solutions and a raft of marketing-oriented providers have disrupted the competitive landscape (for more background, read the book The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail by Clayton Christensen).

Keep a look out for competitive forces

Sometimes the biggest competitor will undercut or overspend in advertising against a new player in the market – but those tactics don’t always work. Sometimes a competitor with significant technological advantages can devour a greater share.

Indeed technology needs to be selected as a part of a greater business mix because it’s just as important as the right people, the right leadership and the right culture.

The right technology will empower a firm’s talent and leadership while offering a greater experience and outcome for clients and customers. And therefore it’s an essential part of any five-year market research/update.

A new player doesn’t have ‘legacy’ assets (i.e. existing and well-established assets that can include people, systems and technology). So a new provider needs an edge: if it can focus on technological solutions that will take responsibility for time-consuming jobs such as tax returns and compliance-based work then it might have a better chance of making an impact on the market. Xero is a great recent example of an innovative business that has seized market share with its Cloud-based software solutions.

How to lift your game

Regular market reviews are essential if you don’t want your business to fall behind. When you focus on the competitive forces at play (five years after launch) you are more likely to identify and meet any technological challenges; and you’re more likely to identify any new competitors that may impact on your business. Ensure that you’re keeping up with customer expectations around how your business operates digitally. Having a strong online presence, like an easy to use website, and giving customers the option to pay or book with your business online can help give customers more reason to spend with your business.  

Each market review needs to:

  1. Assess the competitive landscape (How many new players? What’s happening with older players?)
  2. Track the uptake and penetration of new technologies (Which technologies are emerging as industry standards? Which technologies are disrupting established products and services?) 
  3. Explore new revenue streams from new uses of technology integrated into your business’s products and services (Can an efficiency in one area boost margins in multiple product or service offerings?)
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