When I worked at Mercury Communications, we were the only licensed competitor to BT, most of our staff had come from BT and our market was 100% held by BT. Little wonder that we were focussed on competing with them. And we found that we were able to because the regulator was on our side. Without that advantage we wouldn't even have got started, but with it we took some significant market share.
And that's the point. When you're in competition with another party you must understand why you might win. It's not just enough to be aggressive, which can be counter-productive. The factors going into assessing your strength versus the competition is not just financial, it's whether you have a sustainable technical, commercial or regulatory advantage.
Once you understand which company is in the most powerful position, make sure that you adjust your strategy accordingly. And this means either head to head competition when you are stronger, or avoidance, if you are weaker.
A few years ago my company found itself competing with a much smaller player. There wasn't a lot to choose between us, it had some advantages and we had others. It made the decision to focus on winning customers from us, and far from running away, we went head on. Given that we were seven times their size, there was only ever going to be one winner, and they've since faded away.
Lessons I've learnt:
The last thing to say is … don't over focus on the competition. At the end of the day, you need to provide something your customers want, at a price they can afford, delivered with good service. If you don't do that, your strategy against the competition will be meaningless anyway.
Chris Barling, is CEO of E-Commerce software supplier, Sellerdeck. Originally published on Business Matters.