For any business to remain competitive it’s crucial you understand your business environment. This not only means taking into account your competition but also other external and internal factors relating to your business which could impact your performance.
When looking at your business environment there a number of things you need to take in account.
#01 Your business
While you might live and breathe your business on a day to day basis, sometimes we can look past the current state of it. So taking a moment to properly assess the strengths and weaknesses could flag up things you weren’t aware of. For example your business could be operating at close to full capacity, hampering chances of growing further. Or you could find that your business has over time lost key contacts within major clients which has reduced future sales growth potential. These are just 2 examples but the strengths and weaknesses in your business can come in a number of forms, which once highlighted can provide areas to grow on and improve.
#02 Your competition
While we’re already aware it’s crucial to know who your competitors are, it’s also important to understand where they are. By this we don’t only mean where they’re located geographically, but also where they operate in terms of being online or offline. Why is this so important? Well simply put the manner in which you deal with an online competitor will be different to how you compete with a business offline, therefore your marketing strategy will have to be structured according to where your competition lies.
Additionally, while understanding your own strengths and weaknesses are all good and well, you also need to remain aware of your competitors, as their strengths will provide something you’ll need to compete against while their weaknesses could offer something to take advantage of. For example, if a competitor is suffering from negative press due to poor service, you can look to capitalise on this by making it clear to customers that you place their experience and good service at the heart of what you do.
#03 External factors
Understanding your business and competition completes part of the picture, however you still need to be aware of other external factors to fully understand your business environment. These factors can stretch from new technology being introduced to a change in legislation – basically most things that would impact your industry or your business itself. A typical PEST analysis can help to identify all of the key issues which could affect your business, allowing you to be more proactive by pre-empting any changes, and thus potentially putting you a step ahead of your competitors.
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