In business, innovation is critical. Failure to embrace creativity and change can lead to destruction. If you have any doubts about this, look no further for a cautionary tale than the tragic fate of Blockbuster. Once the world's primary video chain, now effectively obsolete, this company's resistance to evolution even during the rise of Netflix and Redbox clearly demonstrates just how important it is to recognize the strengths of your competitors so you can rise in opposition.
Competition is a driving force in business, and embracing it in a productive manner naturally leads to innovation, adaptation, and growth. Through competition, your company can improve its offerings and generally perform better. By assessing your competitors' success and making productive changes to your own offerings, you will not only help your company grow, you will also bolster the market and benefit consumers as well.
Drawing Inspiration From Your Competition
For some, watching others succeed, especially when they themselves are not, can be demotivating. But those who are able to use others' success as inspiration will often find that they are more prone to innovation and growth, even in the face of failure. Yet, drawing inspiration from your competition can be challenging; you don't want to copy their ideas or practices, but it's important to understand just what your competitors are doing to accomplish great things.
The most dangerous part of competitor research is the potential for idea theft or subconscious influence. It's wise to keep your objectives in order when looking to your competition for inspiration. Prepare your own ideas and specific inquiries to help you stay focused.
In terms of innovation and new opportunities, assessing your competition can give you great insights. You might find, for example, that your competitors fail to address a valuable demographic or skirt around an issue without a proper solution. Whatever the case, locating what your competitors are missing in their offerings or marketing initiatives can give you space to innovate and shine.
Competition Spurs Higher Quality, More Variety, and Lower Prices
While businesses may have an instinctual negative reaction toward the idea of a saturated market, the truth is that, provided competitors are making an effort to distinguish themselves from other brands, entering or participating in "crowded" markets tends to boost consumerism. When consumers are presented with a variety of unique options of a product that all adhere to similar standards at about the same price point, they are more likely to buy the product.
Naturally, brands must then work diligently to make their offering stand out. To do so, companies may need to bolster their marketing efforts, embrace innovation for distribution or production strategies, or really think outside the box to make their product have a lasting impact. Whatever course they take, companies will find that competition will naturally improve their product, leaving them to capitalize on what makes them unique rather than forcing them to compete on a base product level.
Differentiation, Innovation, and Expansion
When a market is saturated with competitors, companies must differentiate themselves and their products in meaningful ways. This practice naturally lends itself to rapid innovation. Historically, differentiation has been a key motivator in the expedient development of advanced technologies.
In the 1990s, we witnessed the explosion of the mobile phone market, where at the start of the decade, few individuals owned one, but by the end, brands like Blackberry, Siemens, and Motorola took heed of Nokia's early success. By the turn of the century, the market expanded from the first mobile phone that could be used anywhere in the world (1992 Nokia 1011) to mobile phones that featured colored text, apps, full keyboards, and even early web access.
The mobile phone market is just one of many examples that demonstrate the power of competition. When faced with competitors who are achieving success and making waves, the most productive course of action is to innovate.
This process not only benefits the individual companies but the overall market and its consumers, as well. Without competition and innovation in the mobile phone market, we likely would not have witnessed such a rapid growth of technology, and the advent of the smartphone might have been delayed. This trend has been documented in a variety of markets, suggesting that innovation is critical in differentiation and expansion.
Internal Competition, When Done Well, Stimulates Growth
Pitting employees against one another can quickly result in unnecessary tension and conflict. However, encouraging healthy, friendly competition among internal teams can promote growth and innovation.
If you have done your research and identified room to innovate and grow or solve an unaddressed issue, you might not have all the answers. Opening up your findings to your team and encouraging everyone to contribute could easily provide you with workable solutions. Not only that, productive competition can also boost morale and grant you new insights into more ways you can improve your products or business model.
There are numerous ways you can encourage innovation through internal competition. Prizes, monetary or otherwise, are often well-received, but there are other tactics you can use. Opportunities for public recognition and ownership of contributions can be effective, as well. If a team member proposes something innovative that you want to implement, giving them the opportunity to be a key player in that effort and even making them the face of the initiative could be great ways to reward innovation.
When promoting internal competition, it is important to remember a few things. Competition should not be used to cause division; when possible, encourage collaboration and teamwork to foster a sense of camaraderie and unity. Additionally, it is just as beneficial to draw from the process of the competition at all stages rather than just the end result. Chances are, your team members will have valuable insights that might otherwise go unnoticed or unheard, and an internal competition could easily lend itself to the discovery and discussion of innovative designs or tactics you can take into account.
In any market, competition can drive innovation and promote widespread creativity and growth. All aspects of business, from product design and production to marketing and customer service, can benefit from competition-driven innovation.