Staying ahead of the competition doesn’t take a doctorate. It takes a strategic approach and a careful examination of the industry and your rivals. For every company the warning signs are different. Here are some tips that should help.
- Know your competitors (friends & enemies): Identify vulnerabilities and threats. Be aware of new entries into the market, recent acquisitions and alliances, regulatory changes and new formulations. Trends change (what happened to the low/no carb craze?) and a company must respond or fall behind.
- Not every competitor is an enemy: Be judicious, but stay open to new alliances. Sometimes the best strategy is to ally with a competitor and expand your line by adding one or more of the competitors products, thus increasing your market share.
- Strategic Alliances: When that unexpected growth spurt occurs, don’t panic. Perhaps a competitor can co-pack the product for you. But be careful, do your homework. Does the competitor/co-packer have the right equipment? Are they too busy themselves to meet delivery deadlines? How consistent is their quality? Will it meet your standards and your customer’s expectations? Be careful you do not take a significant opportunity and turn it into a customer relation’s nightmare.
- Pick your areas of expertise – aim high: Focus on building the company up to a world-class level in a few areas. If you are the best in your area, it is very hard to knock your company off. A competitor may emulate your product line, but if your are alert and continue to innovate and improve the product – it will be very hard for anyone to beat you.
- Innovation: A strong culture of innovation is important. A company that copies the competitor’s products is always behind the curve – trying to catch up. If you chart your own course, your customer will choose your product because it sells the best and the customer knows it will be continually improved.
- Packaging: Remember in the food industry, packaging in important. Be sure to refresh the package routinely, at least every 4-5 years. Changes should be gradual not dramatic unless the product is failing because of the packaging. Be sure to check the flavor profile, ingredient statement and other product elements before blaming the package.
- Disappearing Customers: If you are losing customers – either at the primary (grocer, restaurant) or secondary (consumer) it’s a bad sign. Time to re-examine strategy, and all the elements of product success. i.e.: flavor profile, ingredient statement, packaging, pricing, promotions and support
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