Economic Development Journal of Canada | Economic Development Journal of Canada, 2005
Originally published December 12, 2005

Wake Up and Smell The NEW Competition

Christine Corelli
Christine Corelli & Associates, Inc.

FORGET TOUGH! TODAY COMPETITION IS FIERCE. Your competitors are ready to do whatever it takes to steal your customers. New competitors are emerging daily, and not only from China. Now, we are seeing non-traditional sources that boast new business models and creative strategies that challenge the status quo. Together, the weight of this competitive situation is jeopardizing the way you sell your products and services. It’s time to wake up to this new competition and prepare to meet them head on.

This is no easy task. Many organizations are still challenged with issues and problems exacerbated not only by fierce competition, but also an unstable economy. In addition, customers are more demanding than ever before and costs are rising for supplies, healthcare, and shipping. Employees are stressed by the downsizing, reorganization, restructuring, benefits cutting, hiring freezes and other measures that their companies have instituted to remain profitable.

In addition, many CEO’s believe that they have smart strategies in place to position their companies for future success. They still find themselves challenged to align their people to conform to these strategies to make things happen. The necessary organizational changes to stay viable are most often met with resistance, uncertainty and high levels of job dissatisfaction.

Many companies are seeing an erosion of customer and brand loyalty. Retailers are struggling to come up with new ways to increase store traffic from increasingly inscrutable consumers who are “bargain-seekers.” These are just a few of the challenges businesses are facing today.

What to do? Seneca said, “It’s a rough road that leads to the heights of greatness.” Although each company has its own issues and challenges, here’s what you can do NOW to position your business for future success:

Accept that times have changed. You must come to terms with the fact that what worked in the past may not work in the future. Frankly, that’s not all bad. Through acceptance, you can use change to provide the “creative tension” to keep moving forward. Think of fierce competition as the motivating force that allows you to tap into your creativity. With this energy, you can get your organization running like a well-oiled machine, and try out new, even more effective ways of doing business.
Rethink your entire business strategy. Ask yourself these questions. Have we been complacent for too long? Where might there be opportunities to expand our services? What more can we offer? How can we penetrate new markets?

Speed and execution are the keys to taking advantage of markets in China, Brazil and Russia. Companies who can respond to this emerging situation will be able to remain competitive. Smart companies are moving forward aggressively in search of new markets and new product opportunities through strategic alliances on an international basis.

Be receptive to seeking out innovative new products. They can only enhance your current product line and stimulate business growth. Learn what new products and technology are available that can help expand your business. Accept that you may need to find products overseas that can enhance your current products or enhance your product line. You can’t afford to ignore your alternatives. Some companies have found important new products and technologies (especially on an initial basis) from external companies.

For example, Ray Kroc, the founder of McDonald’s, became exposed to the concept and the corresponding technology for hamburger as a fast food while he was traveling as a sales rep for Mix Master through Southern California in the early 1950s. He established a strategic alliance with the McDonald Brothers and, eventually, bought out the rights to McDonald’s. This led to the multi-billion dollar corporation that exists today.

Another very interesting example is Microsoft. Although Bill Gates has often downplayed the importance of strategic alliances and finding new external products, the initial technology for the PC operating system that he developed for IBM originally came from a small company in Seattle called Seattle Computing. As with Ray Kroc, he initially licensed the software program, and, then, bought out the complete rights to the software that was used for IBM-type PCs.

This was one of the most critical acquisitions of outside technology by a company in the computer software industry. Think about it. Drug companies routinely license-in new pharmaceutical products or buy other companies in order to get their hands on blockbuster products. Pfizer acquired Warner-Lambert so that they could get the rights to Lipitor-- now one of the best selling drugs in the world now for reducing cholesterol. You can’t afford to be blindsided! Neglecting to investigate new markets, technologies and products will almost guarantee that you’ll miss out on new opportunities.

Think about Motorola, which, in the late 1980s, had an insular, arrogant mentality whereby they preferred to ignore overseas competitors and outside new technologies. Before they knew it, they ran into heavy competition from Nokia in Finland, a company they initially dismissed as an obscure, foreign competitor coming from a small market in Scandinavia.

Therefore, if you are not receptive and highly conscious to outside new technology and overseas markets, you may quickly find yourself acting in a defensive position simply to survive. Andy Grove, founder of Intel sagely said, “It is better to be paranoid about competitors, both domestic and foreign, than to have one sneak up on you when you least expect it. All companies need to keep their eyes open, look overseas and be pro-active.”

Invest! Companies are hesitant to expand and invest in additional products and technologies given the current climate of uncertainty. However, sometimes the best time to reevaluate your business and look for new avenues of growth is precisely when everyone else is holding back and not investing.
Differentiate or Die! If what you sell or offer is essentially the same as the competitors, you need to be different and better in your level of service and your approach to marketing and sales. Be willing to take a risk. Tap into your creativity and think about what you can do to differentiate your company from your competitors, so that you will truly stand out in the minds of your customers. What new approach to sales and marketing can you take that will make you stand out from your competition? Innovation will make your sharper, better and bolder by definition.
Invest in technology that reduces your operational cost, improves quality, and increases your contact with the customer. Pay attention to customer relationship management and use CRM technology as the driver and the tool for business growth.
Reexamine your core business values. Seek input from your employees and involve them on a day to day basis. Make sure you and your people live and breathe them every day. Ask them for their extra effort and to show initiative beyond their job description. If rewards are in the picture, you will increase your chances of accomplishing this.
Go back to basics. Work harder than ever to sustain and develop strong business relationships. Businesses don’t do business. People do. Talk with your customers, employees, suppliers and shareholders. Ask questions that will lead to answers that will uncover problems and stimulate fresh ideas. Leverage vendor expertise and enlist their help in growing your own business.
Ask your customers where they see their business in the future. Identify how you can assist them to sell more of their products. Ask what more you can do to help position them for the future to get where they want to be in their own businesses. Then, give them the help they need. In the long run, this will pay off big time. Quality customer relationships breed long-term profitability.
Discover excellence! Create a Total Sales/Service Excellence Culture, where employees recognize that they, too, are “in sales.” Make sure they know that they play a strong role in developing the company’s reputation and establishing customer loyalty. Make them be accountable for their performance not only to management and customers, but also to each other. It has been said, “an organization is only as good as it’s people.” You won’t survive unless you have their commitment to the success of your business. What to do with those who don’t respond?
Get rid of “dead-weight.” Those who do not “buy-in” to this culture can hurt productivity and morale. Successful companies know they always need good people and new blood. And, there are far too many unemployed quality workers out there who would love to have their job.
Brainstorm with your sales staff. This can be an opportunity to make excellent sales people out of ordinary sales people. Analyze your “Best Sales Practices” and share the information with your entire sales force. Urge them to redouble their efforts and offer them better incentives.
Optimize your human capital. Cross train people, in various positions, who are outgoing and possess excellent communication skills to assist your sales force and work the phones, even for a short period of time each day. Instruct them to contact every person who might be a prospect or lead them to one. Again, if rewards are in the picture you will see a higher level of enthusiasm. When things do turn around you will have a competitive edge, as your people will have a better understanding of what your sales force must go through in their everyday sales role. They will be more supportive and understand the “big-picture” to a greater degree.
Improve customer service. No matter how often you’ve heard about the importance of customer service, it always warrants reinforcement. If you want to obtain customer loyalty and remain competitive your level of service must far surpass your competition. Train everyone on customer service skills. Discuss ways you have exceeded customer expectations in the past and what you can do in the future. Make sure your customer is made to feel important--very important, and very appreciated. What have you done lately to show your customers you appreciate them?
Stay enthusiastic. If you do, others will too. Believe in yourself, your company, its products or services, and its people. Then, your customers will be enthused as well.
Lastly, encourage your people to do more than their best each and every day. You need to have an obsession for turning out your best performance with every customer, every employee, and every coworker every day. Be the example. You’re the leader. Lead and your employees and customers will follow.

Companies who institute smart strategies, introduce new products and differentiate themselves from their competitors by portraying a higher level of service in every aspect of the customer experience can gain a competitive edge. Keep in mind, business is different--very different. Determine your future and its potential. Invigorate, innovate and anticipate.

ABOUT THE AUTHOR

Christine Corelli is a business columnist and author of “Wake Up and Smell the Competition.” She has appeared on numerous TV and radio interviews throughout North America. Her articles on topics related to competitive factors have been published in a multitude of magazines and trade publications worldwide. She is a speaker and consultant with an impressive client list that includes, Xerox, Bayer, United Van Lines, Panasonic, Honda, the Harvard Business School Alumni Association, and more.