We are sometimes taught to think that competition is something to fear. Competitors may get information about your product or service and use it to their advantage - either copy the new feature, exploit a problem with it and your product and try to steal customers, or other creative shenanigans.
I have never really understood that attitude towards competition. If a company would look at its own competitive intelligence teams, it would remember that the competition probably has a similar team and already knows similar things about your own company. Let's face it - the world is small and it's easy to overhear conversations at restaurants, cafes, and from loud cellphone talkers. Rumors can be cheap and easy.
Others view competition as something to emulate - almost copy. And that comes with it's own challenges (I'm working on a webinar about that, but here are some).
- You don't know all of the reasons why a competitor develops a solution as they do - you only see the approach they took. And there may be a number of reasons why they took that approach that aren't 100% clear. For example, architectural limitations (system or database structures) and organizational/political difficulties could contribute to product approaches that have nothing to do leveraging best practices or solving a problem based on metrics.
- You inherit your competitor's problems. By implementing their approaches, you may be inheriting their problems as well. Every company has problems, but we're all great at hiding them from public view. What seems like a cool approach to you, could have serious negative impacts on your organization's bottom line.
- You enter the world of commoditization. If you copy your competitors verbatim, you are creating the same product/service offering. And if a customer can't tell the difference between what you offer and what your competitor offers, then you enter into a price war. We saw how that turned out for the airline industry.
And those reasons are the tip of the iceberg why copying your competitor isn't a great idea.
Competition can also be perceived as a partnership opportunity. I learned that from a client (Client A) long ago. I got a new client (Client B) that was their competitor. I asked Client A if it was ok for me to work with Client B, them being competitors and all. Client A was fine with it. They figured I wouldn't share trade secrets because I'm ridiculously honest (which is true), and I only get so technical anyway (also true). They found it beneficial for me to scope out what Client B does and determine if they may be a good fit as a partner for Client A. They wanted an introduction.
Client A also had another great strategy - they knew I'd come up with new ideas for Client B, and some of those ideas may come in handy for Client A. I may not copy those ideas, but I'd be influenced by those ideas. And vice versa. So in many ways, it was a win all the way around.
What changed my percpetion of competition that day was their perspective that competitors were contributors to a larger industry experience.
If we didn't have competition in our industries, we wouldn't necessarily have the drive to make a product/service better. In a way, competition has defined our how our industries work. They have created the competitive trinity - parity, best practices, and baselines.
Definitions of parity, baselines, and best practices
When there is a discrepancy between your product line and the mainline competition, usually the business says that it needs to reach parity. The product team needs to get features and functionality launched that allow them to compete. It's basically being like the other kids on the block. If every kid owns a baseball, a bat, a football, and soccer ball, and you don't own a soccer ball, you aren't at parity - and need to ask you parents or Santa for that soccer ball.
Once a company achieves parity, it is offering baseline functionality. It's the same, but a twist on perception. Baseline functionality is what customers expect to be offered. As more features get added, more features become added to best practices and become part of what's included to reach parity. Users/customers grow accustomed to these features and start expecting to them as part of the product/serivce offering. All around - this increases the users' expectations for an experience.
This collaborative process is great for users but a challenging thing for the business. However, it pushes us all forward to make a better product that offers what the customers want to use.
Parity and baselines define best practices. Best practices are approaches that get results - those features and functionality pieces that appeal to users, help them interact with the system, and meet metric expectations and targets. Mainly - they are approaches to a system that get results from customers.
Now, just because a lot of companies have the same approaches to solve similar problems, doesn't always mean that they are employing the BEST "best practice." The best practice is successful, but unless it is tested against other solutions, it's one approach amongst many. Unfortunately, we don't always know what other organizations do for testing and often make assumptions that their approaches have been tested and are most effective. That's not always the case.
(I'll write more about this in the future. But there have been many times that I have worked with a team to almost copy a competitor only to find out mid-development that they changed their approach.)
Products aren't created or improved by solitary individuals. It's a group effort - and often the group includes companies that compete against your own for customers.
Your company and your competitors are co-creating your industry. You're all contributing to write the rules of how to work best with customers and create the best product/service available. Some rules are based on systems, some are based on ideas they tried - and seemed to work.
If it weren't for your competitors - you wouldn't have best practices, baselines, parity. There wouldn't be something to work from, something to test and see if there is a better solution to a problem. We all keep each other moving forward.
Competitors are nothing to fear; we should embrace the challenges they bring to make us better.