Dealing with competition?

[WillLoxley]

Hullo all,

I realise this might seem a very basic, even silly question, but the worst thing that could happen is forum based ridicule. Ah well.

In any case I tend to completely run from business ideas of mine (note: I'm in the process of setting something up, though I'm not there yet) once I discover competition in the same sphere. I suppose it's just a case of being a bit too pessimistic, and I don't want to go the other way around and just ignore 'real' issues.

A couple of ideas of mine revolved around online catering etc., now this isn't anything new but I believe I'm bringing something which is relatively novel - now the problem I have is that there is usually one competitor (or even in one case, one which is going to launch in January) with a very similar business model.

The question is: How do I stop getting completely put off by competition in the market, and begin identifying ways to neutralise said competition?

 

[Swisaw]

Hullo all,

I realise this might seem a very basic, even silly question, but the worst thing that could happen is forum based ridicule. Ah well.

In any case I tend to completely run from business ideas of mine (note: I'm in the process of setting something up, though I'm not there yet) once I discover competition in the same sphere. I suppose it's just a case of being a bit too pessimistic, and I don't want to go the other way around and just ignore 'real' issues.

A couple of ideas of mine revolved around online catering etc., now this isn't anything new but I believe I'm bringing something which is relatively novel - now the problem I have is that there is usually one competitor (or even in one case, one which is going to launch in January) with a very similar business model.

The question is: How do I stop getting completely put off by competition in the market, and begin identifying ways to neutralise said competition?

You have many ways to beat competition: you have to compete every hours, you have to compete every day and you have to compete for the rest of your life and the life of your business. Otherwise you can not make it, the best you can do is to stay at the bottom of ladder like most of us.

 

[businessfunding]

The question is: How do I stop getting completely put off by competition in the market, and begin identifying ways to neutralise said competition?

First and foremost, competition is a good thing - you should be most concerned if you find there is no competition - why not?

For a small business, the best place to be quite often is following a big competitor with a silly marketing budget - you will live very well off what they leave behind.

At a more day-to-day level, watch and observe he competition. Create your niche and differentiate yourself from them. In many cases your competition will become a resource and perhaps even a customer

 

[DavidWH]

Find a USP.

This doesn't need to be price. We pay more for some supplies, because the supplier is reliable, they're easier to deal with, and help us out, and have established a good relationship.

Other supplier, whilst cheaper, just can't cut the mustard.

 

[WillLoxley]

Hello. Yes, I understand that a lack of competition might actually mean that there's no business to be had! However what I'm talking about specifically was an idea I saw in America (it's called 'caviar', food delivery - it's probably easier to search for it than have me ramble on about it). Essentially I thought it'd work well in London, though a 'site called dinein offers delivery from various London restaurants (the competition). Strangely enough caviar is doing extremely well despite the presence of other companies such as grubhub/seamless (which I believe I've just merged).

I suppose I'm intrigued as to what allows these similar/pretty much the same services to co-exist - I suppose it's akin to hungryhouse/justeat. Both do well, and they're the same thing (I honestly don't know if there's a difference).

Edit to supply links: http://www.dinein.co.uk/
http://venturebeat.com/2013/11/14/caviars-out-to-make-ordering-food-online-a-first-class-experience/

 

[Mitch3473]

First and foremost, competition is a good thing - you should be most concerned if you find there is no competition - why not?

For a small business, the best place to be quite often is following a big competitor with a silly marketing budget - you will live very well off what they leave behind.

At a more day-to-day level, watch and observe he competition. Create your niche and differentiate yourself from them. In many cases your competition will become a resource and perhaps even a customer

Quite agree,,the second mouse get the cheese,as they say.However,and I'm sorry to take this off at a tangent but..........I'm about to start a new business.The basic business plan is tried and trusted and it works.The figures add up,the customer base is there and the area is ripe for the business.However,there is no competition and that worries me slightly.

 

[Mitch3473]

First and foremost, competition is a good thing - you should be most concerned if you find there is no competition - why not?

For a small business, the best place to be quite often is following a big competitor with a silly marketing budget - you will live very well off what they leave behind.

At a more day-to-day level, watch and observe he competition. Create your niche and differentiate yourself from them. In many cases your competition will become a resource and perhaps even a customer

Very good advice. Wendys the burger chain can usually be found in close proximity to McDonalds in the States but their advertising is miniscule.It feeds of McDonalds and I've alway said that the best place to open a hardware store would be next to B&Q

 

[WillLoxley]

Interesting. Could any of you go into a bit more detail about that phenomenon? I see how it appeals to brick and mortar shops, but I've outlined what I was specifically looking at above.

I don't mind reading - so if you've just got a link I'll gladly much up the info.

 

[tony84]

Its worth looking at the competition and learning from them - where do they advertise, what do they charge, times theyre open etc etc.

If everyone baulked as soon as they found there was competition we would have 1 bank, 1 fast food restaurant, 1 supermarket etc etc.

I set up on my own because i had worked for 2 financial advisors - both of which had been in the industry that long their ideas were old fashioned and they were very much this is what we offer this is our price take it or leave it... i prefer to agree service/price with my customers on an individual basis.

Im not offering anything different to those companies so effectively they and every other mortgage advisor are my competition but the way i go about it (i like to think) is different.

Dont be put off by competition, learn from them. Obviously if you have 10 companies in a small village all doing the same thing then you may struggle but if there are 10 companies in a large city you may thrive.

 

[WillLoxley]

Hah indeed, but I suppose the reason I'm hesitant is because the reach of these competitors is technically unlimited. Though as I mentioned hungryhouse/justeat somehow co-exist.

 

[Deleted member 140422]

You need USP
Unique Selling Point

something that makes customers want to buy off you rather than the competition

 

[helen0722]

Hullo all,

I realise this might seem a very basic, even silly question, but the worst thing that could happen is forum based ridicule. Ah well.

In any case I tend to completely run from business ideas of mine (note: I'm in the process of setting something up, though I'm not there yet) once I discover competition in the same sphere. I suppose it's just a case of being a bit too pessimistic, and I don't want to go the other way around and just ignore 'real' issues.

A couple of ideas of mine revolved around online catering etc., now this isn't anything new but I believe I'm bringing something which is relatively novel - now the problem I have is that there is usually one competitor (or even in one case, one which is going to launch in January) with a very similar business model.

The question is: How do I stop getting completely put off by competition in the market, and begin identifying ways to neutralise said competition?

They might have similar business model but make yours outstanding and offer something more, perhaps read about how to beat your competitors, do some homework never know yours might take off.

 

[cjd]

There are some businesses where only a few big competitors can co-exist - mostly those that require expensive infrastructure and national reach. Some online businesses also make life hard for start-ups amazon and ebay pretty much own their markets.

The market you're interested in looks fairly difficult - it's really an online aggregator or specialist directory. The company introduces customers to restaurants, takes an order, takes payment, arranges delivery. There's quite a lot to do there, mostly about recruiting restaurants and promoting a fairly elaborate website to end users - quite a lot of slog and investment.

On the other hand, the competition have given you a list of restaurants that are prepared to work this way so, unless they've signed up exclusive deals - quite probably - you at least know where to start. The harder part seems to me to be finding end users - that could be quite an expensive marketing effort but it also seems to me to be a very local business - non-one wants hot food that's travelled more than a few miles - so you need to start in a very small catchment area and work outwards which would give you the edge you need. I'd say that you need quite a big budget and quite a lot of time and effort.

 

[10032012]

Very sound advice from cjd.

Like tony84 was saying, I would reiterate that by saying "you don't need a USP". Its probably the biggest myth in business... so is the one about not being next door to your competitors... this one obviously not applicable.

I think getting the right brand and ethics behind the brand and knowing your vision is important. I know of many cases where people were using weak USPs... that disappeared within months (i.e. "the only family run restaurant in [location]" - then a new competitor in 2 months time claiming to be family run with an existing competitor promoting themselves being family run once they heard word of this amongst customers!)

I think this is a very volatile market - with a big budget and good sales behind you, you are likely to go far... but starting off in a small area which you will probably need to do, you will come across a lot of shortcomings:-

1) A client who hears bad word about you or bad transaction may terminate all ties with you (this could damage your brand and alienate your customers)

2) A customer who has a bad experience through one client might deflect to your competitors (people are open-minded understanding the set up but the multiplying factor is the size of the company/reach)

3) Big opportunity comes with fake/underground kitchens - all the big names have been caught doing it... do you allow fake locations (i.e. either a domestic kitchen or industrial kitchen in another location producing food apparently coming from somewhere else that doesn't exist) to boost your numbers and your income? The market leaders can use a bit of PR spin to survive, small businesses woudl be heavily damaged

4) Traffic congestion delays can be a big issue to meet customer expectation times

5) The restaurant experience is really not all about the food; and proper restaurants worth their salt (and using little of it) wouldn't undertake takeaway options. You will find it hard for them to get on board. Most of your clients would have already been offering the takeaway either through a competitor in this market or more likely through their own means. The whole restaurant experience is about 'eating out', presentation and hospitality etc.

Apart from the 'average' chinese and indian (in particular) takeaway restaurants, many deliver themselves without having to pay a middleman a commission (which is an issue - a threat to your business), ...they are delivering stereotypical cafeteria-like quality food, step up from ready meal, that do well out of it; I really think the bubble might be about to burst.

6) Hygiene and immigration - when potentially one of your clients get busted by the home office or environmental health get involved... could damage your brand

When you are small any of the above could knock you out overnight.

Not trying to scare you out of the marketplace, but JustEat has had over £80m of investment poured into it to make it what it is today. I am not knocking them but I don't think they have their market totally covered - £80m is a lot of money...

What you need is strategy... do you want a small local business or do you want a *fingers crossed* large business one day doing this? Find any weakness in the large competitors... if they don't have a big grip on an area in the UK... take it... do your best to take it... preferably at least a county... be the market leader in that county, have plans to expand but wait for the buy out offer...

 

[iBusiness Forums]

Define your USP (Unique Selling Proposition) that separates you from the rest.

Be creative in your marketing strategy and never be intimidated by your rivals. Competition will always be there. That's a fact. But just learn to strategize and be honest with your dealings. Treat your employees well also. Let them be your "spies". They can go to your competition's store and find out more and learn from it

Good luck

 

[businessfunding]

To return to the USP - sadly it is over-used and slightly confusing - but if you start to understand marketing (in its widest context) it will start to make sense.

I tend to use the term 'differentiator' which is a little warmer and less absolute - several restaurant can sit together but each needs to be a little different.

With regards to location (physical or cyber) again, it will depend on your marketing strategy - you can either be where people go, or you can bring people to you. - or to over-simplify, you can spend a lot of money on prime location, or go for a lesser location nd invest in promotion.

The more tightly you define your market the more easily you will communicate with them

 

[Jet Virtual]

First and foremost, competition is a good thing - you should be most concerned if you find there is no competition - why not?

For a small business, the best place to be quite often is following a big competitor with a silly marketing budget - you will live very well off what they leave behind.

At a more day-to-day level, watch and observe he competition. Create your niche and differentiate yourself from them. In many cases your competition will become a resource and perhaps even a customer

Firstly, the above comment is GOLD!

Secondly, on an emotional level you need to overcome your FEAR.

Worrying about the competition is like worrying about the weather, you can't change either!

All you can do is try your best and don't over-think too much.

Best of luck!

 

[Kirk James]

I have only just come to this forum ,(and am keen to stay) and do not want to be seen as self promoting too much so if you send me a pm I will send you my link to free info and give some advice. I have had a large catering business along with numerous restaurants.

The best advice I have heard regarding competition (if you want a one liner), is to just be the best you can be at what you do and not worry too much about them.

I guess you know how to create and maintain an online presence? So that when your customers search your keywords online, your business comes up front and centre.

 

[WillLoxley]

Hi Kirk, I'll give you a prod.

And I do understand how the idea of a restaurant suddenly offering 'takeaway' might seem to harm their brand. The idea here is to avoid that. It's not something flung at you in some nasty, polystyrene box but closer to having a personal caterer etc. etc.

You're also right about those average restaurants having their own takeaway service. I think I've answered that above, but just to iterate, I don't want to offer things from those types lower down on the food chain (hehe)..

The other problems are those which I must solve. Traffic is a fairly weak point IMO, it is valid but it's something I've taken into account.

Thanks though folks, once my mind isn't as mashed I'll put a more detailed response up.

 

[WillLoxley]

By the by, the only reason I mentioned hungryhouse and justeat is because that example showcases two large competitors, who apparently co-exist in perfect (hah) harmony.

 

[WillLoxley]

Quick bump

 

[The web design girl]

Hi Will! I understand how you feel. Southend is absolutely saturated with Web Design Companies trying to undercut each other. When I look at competitors web sites I can't believe that I am competing with such rubbish! Some companies offer good looking websites but they use templates and charge very little. I work really hard building bespoke designs but I need to charge for my time and expertise. It is very hard, but don't loose heart. Running a business is never easy and we can't let competitors put us off. They are the ones that keep us on our toes. If you really believe in your products and services, have a clear business plan and stick to it. You can go against your competitors with success. Where is the best place to open a coffee shop? Next door to Costa! Undercut their costs and serve better tasting coffee! You seem very nice and customers always like nice.