USING COMPETITOR RESEARCH AS A STRATEGIC TOOL

Sometimes, strategy is considered to be a highbrow topic for small business. Actually, not so! Businesses that take the time to evaluate their strengths, weaknesses and unique position in the marketplace and then develop a strategy to take advantage of their uniqueness are typically more profitable than competitors.

Competitor research, also called competitive intelligence or competitor mystery shopping, can be a key data gathering tool in the strategic process. Actually, it may be all that is needed externally for many small businesses to develop a satisfactory business strategy!

My capstone college course in college was strategic management, emphasizing that every business is duty-bound to understand not only who its competitors are but also their competitive strengths and weaknesses. Only then can you evaluate your own business’ relative “SWOTs” (strengths, weaknesses, opportunities, threats). Knowing more about your competitors will thus help your business grow and succeed.

Competitor research can hone in one price primarily but it may also address key issues such as customer service, promotional/marketing methods used, warranty policies, location and layout and financing options made available by your competitors.

While traditional market research is a tactical, methods-driven discipline that measures beliefs and perceptions through surveys or focus groups, competitor research uses both primary and secondary research and goes beyond answering existing questions to raising new ones and guiding action.

Contact O'Hara Business Strategies to learn more about how competitor research can be a key, cost-effective tool for developing a winning strategy for your business!

COMPETITOR RESEARCH CASE STUDIES

Competitor research is an excellent market research tool to learn more about your competition, so you can differentiate your business and increase profits!

A few O'Hara Business Strategies' (OBS) case studies have included:

Banking Case Study
O'Hara Business Strategies (OBS) worked with a major merchant services (credit card processing) client to compare its services to other competing major financial institutions. This client wanted to evaluate everything from the overall rate quoted to a new or established business of various sizes (based on revenue) to the customer service offered by their merchant services specialists. Additionally, the client wanted to track the type of pricing model used and quoted, the cost of equipment and software used, whether there were fees for charge-backs or for the latest security features to block identity theft.  OBS used business savvy, discretion, confidentiality and accurate data gathering skills to add value to this client!

Agriculture/ Aquaculture Case Study
One of O'Hara Business' Strategies first projects was for a trout fishing ranch, which served residential and commercial tourist customers. This client was primarily interested in comparing prices with its' competitors. However, having the foresight to realize that non-monetary differences often make the difference between a marginally profitable and very successful business, the client also chose to track their competitors' customer service phone skills, delivery times, product offerings, and how they responded to special demands and requests. This client appreciated our firm as "professional, concise, and cost effective...the wisest management tool we used (that year)...".

Business Services Firm Case Study
OBS assisted a growing, Montana-based business services firm compare its' rates with a broad cross-section of competitors for several of its offerings. This firm appreciated OBS's clear and concise comparison of competing firms, noting that it gave them the chance "...to gain valuable information and insight about my competition." Additionally, OBS used this information to provide advice about how to capitalize on this information to fine tune their position in the market in terms of price and help focus its offered services.  This project was an example where OBS intentionally challenged a client's competitors to get a feel for how they would handle more stressful, real-life situations.

Grocery Store Case Study
Sometimes, "competitors" can be other stores within the same chain. In some cases, OBS has been hired by a parent company to evaluate and audit franchised or affiliated stores for adherence to company standards in merchandising, inventory management, company signage as examples.  In addition to the pricing of selected items, other factors such as staff friendliness & availability, restroom cleanliness, and freezer & refrigerator temperature levels were audited. This information was compared to competing stores and top performing stores were recognized.



Conclusion
As you can see from these examples, competitor research involves all aspects of business management, not just the products, services and prices that are traditionally the focus of market research. And competitor research or mystery shopping is a great way to acquire this necessary information. It is a proven business tool, invaluable in growing your business and improving your bottom line.

BENEFITS OF REGULAR FINANCIAL STATEMENTS

Unlike a major corporation that is required by stockholders, banks, or regulators to have monthly or quarterly financial statements, there is typically no such mandate for most small businesses.

Many small business owners may dismiss the idea of regular financial statements, thinking they are:

• Too expensive,
• Too much of a hassle,
• Unnecessary, since their business is simple, or 
• They have gotten along without them for many years.

However, regular (monthly or quarterly) financial statements offer the following POWERFUL benefits:

• A holistic, and inter-related snapshot of a company's finances--it's a report card in the form of the income statement, it shows the financial health of a business in the balance sheet, and summarizes cash-- the "life blood" in the statement of cash flows.  
• A mental, one time "financial statement" in your head, or on the back of a napkin, about how you did on one job or over one month doesn't tell the whole story.  The three financial statements provide crucial accuracy and insight! 
• I find time and again that human nature distorts results positively --how we think or want things to be aren't how they actually are when wearing these "rose-colored glasses". Perception is not always reality, in the case of financial information! Having those hard numbers in front of you helps you make decisions more rationally and logically, rather than based on deluded, emotional hunches.
• While your profit picture for one job or one month may not be that "complicated," the whole picture may need a closer look. The accounting system allows you to see the "big picture" rather than fixating on just one great job or one super month of sales. 
• Financials allow you to see trends...Is gross profit holding steady? Are travel expenses getting out of hand? Are sales in line with goals?
• Monthly financial financial statements are the solid foundation for further study of questionable line items, for budgeting, for comparing current vs. prior years, for comparing different departments or products, for other analysis like capital budgeting or lease-buy decisions, and they are a rational benchmark for goals.
• Regular financials create peace of mind for a business owner! The certainty and accuracy of knowing a bank balance, the current inventory level or that profits are at an expected level all feed this peace of mind!

While costs of gathering information certainly need to be considered, THE BOTTOM LINE is, you know your business better by seeing the whole picture (and diverse aspects about it), with information in front of you or with it easily accessible. Helping a business owner be intelligently pro-active is a strong benefit of regular financial statements!

SO WHAT IS TICKING YOUR STAFF OFF...


While the modern workplace is definitely a two way street, with managers and business execs dealing with problem employees as well, it's important to realize some of the issues that frustrate employees, especially if you are doing the frustrating!

Why should you care, since you are in charge? Well, because the bottom line is, it's wise to do so! Such issues lead to reduced morale taking the form of lost productivity, turnover, and a toxic work environment. How about subtle and not so subtle forms of sabotage! An example: I recall one concrete contractor who was actually quite afraid of his workers quitting before an important job got done or, if you can believe it, even returning from lunch!

Let's take five problem management issues/styles to be aware of:

• Meddling, micro-managing managers!  Having seen and experienced quite a few over the years, this type of management behavior burns people out fast, stifles creativity, creates a toxic work environment and seriously hinders productivity. While new staffers expect to be "baby sat" and new employees should be trained thoroughly, competent employees should be given the resources to do the job and cut loose. If someone seriously can't do the work in a reasonable period of time, then it's time for a decision!  If a company has experienced, competent employees that are not allowed to do their job, this often points to an insecure, "control freak"-type management, that is almost always not effective at running a business. Such managers typically don't manage from financial statements, expected results, or a business plan....and they don't train employees. 

• Mixed messages & moving goal posts! When a manager continually changes the goal or standard, especially quickly and unreasonably without some commensurate increase in compensation, or worse yet, with threats and browbeating, that creates frustration. In today's corporate environment the tension is often between accuracy and speed. One consultant from a major firm quipped to me recently, "Speed is more favored by today's companies." I tend to agree but I would say both are desired, at least by smart management! A fast worker offers and receives quick feedback. The job is done or the quote is processed. It's out the door! Accuracy, or the lack of it, can hit hard, but less often. A mistake can be missed that costs hundreds or thousands of dollars, auditors can come down hard months later, and reputations can be damaged. But, If management preaches speed continually, creating a climate of intense pressure for it with little positive feedback for accuracy, it is human nature to grease what is "the squeakiest wheel." 

• Threats, belittling and ridicule - Whether express or implied, public threats and domineering behavior, can stifle a team environment. Stifling discussion or reasonable questions with accusations or discipline provides the incentive to remain silent! Bullying management can take a toll on creativity and the input many employers claim to want. It is often worth it for one of your employees to ask a question, make a suggestion, etc?

• Creating & fostering conflict! Setting one department against another, processing vs. quality control, as an example, can also destroy the team spirit. No matter how many pot lucks, game days, etc. management might have, the toxicity created by handling conflict unfairly among staff can't be overstated. These "team events" may be loathed in such cases! The same conflict can be created among individual employees who think they hold the same title--whether it be CFO, office manager or supervisor. Such situations breed tension and strife. Most managers deny doing this, but the actions need to be observed! 

• "Mastery by mystery" management. Discussing the mixed messages before, a manifestation of this extreme is how management may preach one thing like speed, speed, speed. And rarely, speak of accuracy or "data integrity". But then use a less favored subordinate's poor performance on a few tasks as the pretext for discipline, or even dismissal. In other words, no one really knows what excellence or poor performance are, because they exist only in the mind, or moods and whims of the manager.

14 ISSUES & ATTITUDES

AFFECTING EMPLOYEES'  PERFORMANCE

 

This is an excellent comprehensive list I saw recently in an old Human Resources textbook. It helps tell the story of what motivates employees, what's important to them and what can contribute to turnover in a company.

1. Job Demands - Includes work pressure, fatigue, boredom, and work load. 
2. Working Conditions - Includes equipment adequacy, safety, and annoyances.  
3. Pay - Adequacy, compared to competing firms and administration of pay.
4. Employee benefits - Benefits offered and how they are administered.
5. Friendliness, cooperation of fellow employees - Includes friction and bossiness.
6. Supervisor-employee interpersonal relations - Includes fairness, friendliness, treatment of suggestions, follow-through on promises.
7. Confidence in management - The belief in management's integrity and concern for their employee's welfare.
8. Technical competence of supervision - Includes decision making, administrative skill, work organization and ability to train employees
9. Effectiveness of administration - Includes cooperation among departments, efficiency of company operations and confidence in higher levels of management.
10. Adequacy of communication - Includes complaint-handling, freedom to express opinions and suggest improvements, and providing information about future plans.
11. Security of job and work relations - Includes security from arbitrary discharge and recognition of length of service. 
12. Status and recognition - Includes standing with the company and respect for judgment. 
13. Identification with the company - Pride in the company and a sense of belonging in the company.
14. Opportunity for growth and advancement - Includes the opportunity to develop one's skills and get ahead in the organization.

*Used under the Fair Use Rules of the U.S. Copyright Law. From the book, "Managing Human Resources", pg. 537 by Herbert J. Chruden and Arthur W. Sherman, Jr. Published by South-Western Publishing Co. The book reprinted this information from "Administration and Interpretation of the SRA Attitude Survey by Science Research Associates, Inc.