Competition is permanent and inherent in the business sphere. Almost every business and company faces competition and aspires to destroy it in order to come out on top and rule the market. This is because competition can be a true menace to your business by obliterating your market share and crashing your profits. Thus, it is important that a business has a competitive monitoring strategy in place.
There are many examples where competition totally destroyed a successfully running business. One such example is of Orkut, a social networking site that is obsolete today thanks to stiff competition from Facebook.
In essence, competitive monitoring strategy is about watching and assessing the competition by utilizing modern day technologies with the prime purpose of gaining an edge. Here are some reasons as to why you should have a competitive monitoring strategy.
· Allows minimizing potential losses and capturing potential profits
Every business’s foundation rests upon maximizing profits, while minimizing the losses. Monitoring your competitor’s business allows better awareness of their strategies and tactics, and in retrospect, a better understanding on how to tackle potential losses and seize profits. By having an effective and efficient monitoring strategy, you can assess your competitor’s strategies for example on a new product that they are launching, which allows you to alter sales tactics for your own products and maybe offer a discount to retain your market share.
· Your competitors are doing it
While technological innovations like social media and online marketing have made it easy for businesses and organizations to reach out to their customers, it has facilitated competition even more so. Thus, competition is much more dense and intense today, where everyone is looking for ways to outperform the rest of the competition. So, it is only commonsense that your competitors are also monitoring your business in order to have an edge over you. Underestimating your competition is likely to sink your profits and market share.
· Better strategies and tactics
Maybe there is something that your competitor is doing right and you are not which is gaining them more market share. Studying your competition like what strategies they are using for their social media marketing can be a learning experience for you. If their new marketing campaign has been successful, you can study and analyze their campaign in order to uncover the secret to their success and then with some modification implement it in your business.
On the other hand, if their campaign failed, you can learn from their mistakes and avoid making them. Thus, an effective monitoring strategy is likely to give you a better understanding of what strategies to implement and what not to implement.