Sunday, December 14, 2008

Keep your eye on your changing competitors. They may not be who you suspect they are!

On Friday Davenports was blessed with a training session with Arthur Shelley.
We had asked him to enlighten us on the subject of knowledge management. It is a trendy term which basically covers how we learn and how we share that learning with others. In professional organisations there are not many assets other than what is between the ears of those who work there.
My simple brain absorbed quite a few new things and it was severely stretched at certain times.
But sometimes you come away from learning sessions with unexpected thoughts.
Arthur talked about his time at Cadbury's. He related how a strong competing force eating away at chocolate consumption was the mobile phone.For some moments I thought that my hearing had somehow failed me again. I could not contemplate the relationship between mobile phones and chocolate sales.
Arthur went on to explain that teenagers were major consumers of chocolate. They were also being targetted by mobile phone providers and mobile phone use in this niche was skyrocketting. But they had limited funds and spending power. This meant that, in order to be trendy and have a mobile phone, they had to limit their expenditure on other items such as chocolates and sweets.
The little faint light went on in my head and gradually grew to be of light-house proportions.
He then asked some questions about our competitors. Initially 'the Big 4' accounting practices were nominated. But as the discussion ensued there was a realisation that these firms don't operate in our market at all.
We pick up some clients from 'second tier' firms who are looking for lower fees, better value for money and better access to partners and staff.
And so it is in this day and age that our main competitors are both the smaller suburban firms who are within reasonable proximity and the vast array of specialist small business consultants who are moving into the business advice area.The smaller suburban firms are well-positioned to play the 'lower fees' card.
As well some would regard the Australian Tax Office's initiatives in providing more user-friendly software to prepare tax returns online as being threatening to their income.

So it seems to me that it wont hurt you to review your competitive position and see whether you have any competitive advantage whatsoever in your market and whether it is being undermined by not only your normal suspects but some unforeseen ones as well.

In this case I can only reiterate that "ignorance is definitely not bliss".

1 comment:

  1. Good points. Unique competitive advantage is, first, hard to distinguish and, subsequently, hard to maintain (as your competition follow or copy your advantage). An advantage you can build that is harder to imitate is the advantage you have with excellent people; their service, their reputation, their knowledge and more.

    ReplyDelete