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Competition In Business & Your Personal Life

March 3, 2010

Competition can be your downfall or your inspiration depending on how you position yourself to handle it. For many businesses competition is something that gets in the way of better profit margins and a higher traffic count. You don’t even have to think of competition in a business sense to see its positive or negative effects on people’s lives. You may be in competition with a coworker for a promotion, or in competition with your roommates to see who can loose the most weight on your new P90X workout regimen. There are many forms of competition, and while I was recently watching a race track side with a buddy of mine (that I race against) I started to think of this blog topic and how it translates into my every day life.

Businesses and competition.
“Competition is the keen cutting edge of business, always shaving away at costs”
-Henry Ford
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Businesses have been competing since the beginning of time. They have to evolve in order to stay competitive and never has that been more essential than in today’s market place. We see offers for “better, cheaper, faster, longer” all the time and the consumer is a savvy, cynical target that marketers have to hit. In recent years the market has shown price to be its number one factor. This wasn’t always so when our economy was thriving and people would pay a bit extra for a popular brand or heartier product. However, with the decline of the financial markets and the jobless rates rising by the month people are tightening up their wallets more and more. This is when competition is crucial and we’re seeing numerous companies answer the call of the consumer.

attverizon

The most notable battle in my mind right now would be the battle raging between Verizon and AT&T. These two companies are dueling it out on every media outlet known to man. You cannot watch a TV show, log in to facebook or listen to the radio without hearing a commercial where one company is ripping the other company’s coverage area or network to shreds. While this can be annoying it’s greatly benefiting the consumer. We’ve seen plan prices drop almost 50% in the last 6 moths. The competition has driven prices down and the consumer is seeing much cheaper phone bills, better phones and larger coverage areas thanks to good old competition. It’s a great thing to sit back and watch two companies run leaner, faster and smarter than ever before. Now, I’m sure the execs at Verizon and AT&T would argue otherwise, but I’m not one of them.

Another remarkable aspect of business competition is a company’s ability to predict where the market will go in the coming years. While this sounds impossible without the help of a crystal ball some companies have been able to effectively predict consumer’s habits well before they change. One particular company comes to mind and that’s Honda. Honda had an amazing story back in the early 80’s when American vehicles were large, heavy, uneconomical and American mussel was much cooler than Civic responsibility (pun intended). The thought to avoid large gas guzzlers and market smaller commuter vehicles was a bold move on their part and the fact that gas prices were a focus even then shows you how well they planned ahead. The result was a car that could achieve 49 Highway MPG in 1980! This mindset forever changed the way auto manufacturers thought about fuel consumption. Today, Honda still leads the world in making the most fuel efficient vehicles and doesn’t have to use the “Green” marketing tactic nearly as much as competitors because they already established themselves as a eco friendly company decades ago. Just say out loud the first thing that comes to mind when you think of a Honda and you’ll see what I’m talking about.

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Someone has to loose.

I cannot think of a business in the world that’s not susceptible to fierce competition. With the expectation of the US government, but that’s a different topic for a different post. Even juggernauts like Google, Microsoft and IBM have competitors and have to stay on their toes in order to thrive. Businesses that listen to consumers, plan accordingly, and execute effectively will be rewarded with better profit margins, higher brand recondition and more market share. Those that fail to adapt will fall by the wayside.

A prime example of a business failing to react to the markets demands would be the Wonder Bread brand. Now, I’m not bashing Wonder Breads product. In fact I used to love the stuff when I was a kid, and more than likely your parents also lived in a Wonder Bread house. They had a ton of market share and the nostalgic brand had a great run all the way up until people stopped buying it earlier this decade. Why did they stop buying it you ask? The youngsters that grew up loving the enriched, fortified and bright white bread grew to hate what it did to their mid sections. The new consumer was carb conscious, and wanted whole wheat or grain bread. It wasn’t cool to eat something with so much sugar and chemicals. People were now aware of the affects a high carb and sugar diet had on the body. This shift in consumer spending had Wonder Bread competing with companies like Natures Own, and store brands with cheap white bread for market share. They failed to listen to the consumer and they added additional products too late in the game. The lack of whole grain options and a brand deep rooted with old eating habits soon found itself in bankruptcy court. Competition unfortunately produces losers. Wonder Bread was a loser.

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Personal competition.
“The ability to learn faster than your competitors may be only sustainable competitive advantage.” -Arie de Geus

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I chose the quote above because it rings true in the racing world. Most of the time I’m matched up against competitors with similar skill and equipment on the grid. It’s what I choose to do with my skill and equipment that puts me ahead or behind my competition. Sometimes I use my foresight and abilities to choose a faster line, make a narrow pass or carry more speed into a turn to gain ground on a competitor. Other times I fail to react timely, make a poor observation or choose to follow, and I’m left with nothing more than a bad position and a lot of ground to make up. Racing does something to me that I never really thought possible while riding a motorcycle. It allows me to concentrate on my performance, competitors and my environment all at the same time while blocking out everything else in my life. The random questions or thoughts that pop into your head during the day are distant conversation stuck somewhere in the doldrums of your mind, reserved for a time after the checkered flag has been waved. Nothing matters other than winning, and nothing takes that feeling away until you move over the finish line. It’s a very primal train of thought but one necessary for many racers and businesses. Just think if companies, CEO’s, CFO’s or Presidents could have such a concentrated mind set. It would be amazing what one could accomplish.

I’m not a super competitive person by nature, but I do enjoy what competition brings out in me. I like the feeling I get when I grid up and perform well. Others do not handle competition well and people often let it bring out the worse in them. Businesses are no different. It’s all in how you prepare for the time ahead that will determine how well you match up. The consumers and your competitors will keep moving and adapting so it’s up to you if you want to succeed.

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