“Companies that solely focus on competition will die. Those that focus on value creation will thrive.” – Edward de Bono
A business is not a 90 minutes football match where the coach supervises and constantly monitors the performance of the other teams in the league whilst the match is ongoing. A business is a going concern and your strategies must align with your business mission, goals and objectives.
In the business world, entrepreneurs tend to closely stalk their competition and get carried away by their performance. This drives them to imitate their competitor’s causing them to lose track of their own reason for existence (mission). If another business is launching a product or a new feature, you do not need to feel under pressure to roll out the same. First, your target market might be different, secondly, your customers might want something else. If you spend too much time focusing on competition and copying their every move, you will lose focus and never create something great.
Porsche and Ford are two automakers but with a different vision and mission. Porsche prides itself as a premium auto manufacturer and concentrates on the finest engineering finishing which makes their cars expensive and affordable only to the upper class. Ford on the other hand is a global car manufacturer that envisions itself to have its product in every home. So their concentration is on distribution and marketing. They target all segments of the market and most especially the middle class. The management of Porsche cannot compare their performance with Ford Autos because an element of the former’s mission is engineering perfection while the latter is mass manufacturing, sales and distribution.
Henry Ford, the founder of the Ford motor company wanted to develop an automobile that could easily be accessed by the middle class Americans. His innovation then turned out to revolutionise the American transportation business. He stuck with his business goals and did not allow any competitors performance or activities to change this. He understood that focusing solely on competition would only cause you to lose focus of your own goals and objectives. You would continue to chase others instead of working on improving your own business and achieving your planned goals. What is most important is making better products and services, having the right set of people, which will end up moving your business to the next level.
Now don’t get confused! No one is saying you should completely ignore your competition. In fact, competition is good for your business. No business should operate in isolation. Being aware of your competitors allows you to get creative and innovative. Read more here about how competition helps your business grow. However, do not allow it to turn into an obsession that you end up playing keep up with your competitors, trying to copy their every move. This will add no value to your business and end up killing it.
Your business is your primary concern and the initial survival of your firm in a competitive business environment starts from focusing on your business rather than focusing on competition. Understand your internal and external environment, craft out your mission, vision and objectives and formulate and implement strategies that will give you competitive advantage over your competitors in that environment for the desired performance.
With these, you would have clearly understood your business and as an entrepreneur, you can explain your firm’s performance to investors and other stakeholders.