As we skip merrily through the areas of focus for a real live Business Plan we land on Competitive Analysis. This subject can separate fantasy from reality very quickly.
If you ask your boss (who may be yourself) who your competition is, typically one rattles off the names of three or four firms who always seem to be bidding on the same projects you are. Hint: those aren’t necessarily your competition. They may be companies who are stuck in the same rut you are.
If you ask your COO or CFO who your competition is, they may provide a list of three or four – or more – companies with some degree of overlap from the CEO’s list. However, their list will be based on their professional context. Perhaps these are the companies who produce the most efficient and cost effective, profitable solutions compared with the slickest, edgy and trendy ones.
If you ask a middle manager the same question and even the business development/sales folks, guess what? The list of perceived competitors grows.
While you may know the names of the big and little guys and gals who dominate your industry, they may not be your actual competition. Some of these “competitors” are simply too big – or too small – to handle projects of a certain size. Which means they need companies like you as collaborators. So there’s a niche for you.
Take a look at your gross annual revenue and profitability. Those numbers are your company’s pulse. Take a look at the typical size of a project and it’s duration. You will begin to get an idea of the size of your realistic playground.
You know, there’s nothing wrong with being a niche player within the small to mid-sized competitive arena. It’s just that most companies are so hung up competing – in their own minds – against the “big boys” that they don’t re-calibrate, realistically, and understand their true competitive reach.
Who are the best-in-class among the players in your market space? In your engineering space? A competitive analysis defines the true competitive playing field in which your company operates.
Yes, I know you feel you can go toe-to-toe with the giants. However, if you had to put together a team to provide all of the resources a giant can provide, what type of management, financing,coordination, efficiency and profitability would actually result?
A Competitive Analysis, first and foremost, involves looking at your strengths and weaknesses as a company and deciding how to capitalize on your strengths within a realistic marketplace you have defined. You start by looking inward at yourself, not outward to a blurry horizon where the nebulous “competition” lives.
Understanding what your company does very, very well, consistently, provides you with your competitive arsenal.
This understanding also allows you to evaluate what and how to present to new and existing clients. This information is your Competitive Advantage. Hint: your competitive advantage does not involve providing excellent customer service and responsiveness and on-time, cost-effective delivery (soft advantages) unless you can dollarize just how these catch phrases translate into positively impacting your customers’ bottom line. It takes more than just being identified as the feel-good company. Or the Little Engine That Could.
Armed with these insights from your competitive analysis, I can guarantee it will be time to decide who your competitors really are: both direct competitors and indirect.
Your list may change, allowing your company to become more successful competing in the right engineering space against the right types of competitors. And success will allow your company to move to the next level, because you will understand the factors – and barriers – impacting your success. Not theirs. Yours.
Sometimes, your greatest competitor is yourself. Time to get your company on the same page? Think about it.
Babette N. Ten Haken, Founder & President of Sales Aerobics for Engineers®, LLC, brings entrepreneurial mojo and business- and revenue-producing collaboration and communication tools to small and mid-sized businesses and startups. She was named one of the Top 50 Sales & Marketing Influencers 2013-2016. Her book, Do YOU Mean Business? focuses on technical / non-technical collaboration strategies and tools and is available on Amazon.