When we think of competition, it’s easy to think simply of other companies that perform similar work to our own. The guy down the street whose trucks we see all over the place, or the companies who seem larger than life at the trade shows we attend.
But the fact is, competition comes in various forms and frequently has nothing to do with other companies during similar work. Sometimes competition isn’t a company at all. And different competitors will appear at different times in a company’s growth.
As a company grows (and as we grow and mature as business leaders), competitive forces will reveal themselves to us. Yet, regardless of a company’s size or age, all competitive forces exist at all times. They may simply go unnoticed until they’re encountered when we’re competing against them for customers in the market.
For the sake of simplicity, the model I use to illustrate the competitive forces has three different levels. Picture them as you might a target with three concentric circles expanding outward from the center.
Let’s start with the innermost circle. We’ll call these Personal Competitive Forces—what every business owner faces on a daily basis. These forces can be physical, emotional, behavioral, or even financial. They can also be a factor of time, such as when there’s an unexpected tight deadline that must be met or when the demands of the business exceed the pace of our internal clock. With very few exceptions, the competitive forces found in this inner-most circle are the ones over which we have the most control.
Moving out from the center, the next circle is what we’ll call Internal Competitive Forces. These are more visible than those in the inner-most circle, and they typically involve more than just the business owner. This is where we find direct competitors for our customers. It’s also where we notice a competitor’s vehicles or others at trade shows, as mentioned above. But it goes beyond that and includes our own company’s capacity to operate profitably or to deliver on the promises we’ve made to our customers.
The outermost circle is where we find External Competitive Forces. These we have very little direct control over. They are things like the weather, the economy, the unemployment rate, and economic trends within an industry.
It’s worth repeating that all these forces are at play all the time. It’s the job of the business owner to recognize the ones that are having the greatest impact on their company at the time, or will have the greatest impact in the future, and draft strategies to address them.
While none of these competitive forces alone may be fatal to a company, each of them causes unnecessary friction that creates drag on a company’s ability to compete. The more of these forces that exist, the greater the drag, consuming unnecessary resources and energy. Just as with an aircraft in flight, when there’s enough drag, it will eventually stall, causing it to fall.
In the coming weeks I’ll dive deeper into the three levels of competition outlined above and how they both influence and are influenced by each other. I’ll also explore strategies we can use to address them.
