Here’s a crazy question – can you profit from your competitor’s failures? The answer is: YES! Failure can light a fire in you to succeed and can be a rare opportunity for your business and team to profit from others’ mistakes without suffering the same losses or consequences. In fact, sometimes you can even learn a great deal more from failure than from success.
So, your competitor just faced a failure — now what? Do you want to learn from your competitor’s failures and grow your business and team?
If so, here are some helpful tips for you to be strategic and turn this rare opportunity into a time and money saver for your business and ultimately have a profitable future.
Seize the opportunity
Although your competitor just faced a failure, this isn’t an automatic win for you — an opportunity has just presented itself.Although your competitor just faced a failure, this isn’t an automatic win for you. Click To Tweet
So what does this mean?
It’s important to be proactive and think of this failure as an opportunity to learn from your competitor’s negative and positive actions in order to strengthen and grow your own business and team without facing similar outcomes your competitor faced.
This crucial moment is not only a chance to save time, money and resources, but a time to gain more market share, attract new clients, expand your team and many more beneficial outcomes for your business.
Now what? Recognize this moment, be proactive and seize this opportunity!
Understand your competitor
Now that you’ve recognized this rare opportunity and decided to be strategic and learn something from it, it’s important to do your research and understand why your competitor failed before taking any major course of action.
What did your competitor do wrong?
Did your competitor make poor financial decisions? Was your competitor not in touch with customer needs? Did your competitor face a market threat? Was your competitor involved in negative media issues?
Whatever the reasons are, you must understand what went wrong and right in order to avoid making the same mistakes as your competitor and to do what’s right for your own business.
SWOT the competition
Part of understanding why your competitor failed is to first perform a strengths, weaknesses, opportunities and threats (SWOT) analysis of your failed competitor. A SWOT analysis will help you determine where your competitor stands on these four key strategic areas (strengths, weaknesses, opportunities and threats).
You’ll want to perform a SWOT analysis for your own business as well to compare alongside your competitor’s SWOT analysis to better determine what business changes are needed for you to profit from your competitor’s failures.Get a free SWOT analysis template here. Click To Tweet
Strengths will provide an analysis of your competitor’s key advantages compared to your business’. Maybe your competitor has an extremely valuable product with a patented technology or maybe your business has a more appealing sales price point for its customers.
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Weaknesses will review the areas in which you’re at a disadvantage to compared to your competitor. Maybe your competitor’s product has better technology over your business’ or maybe your competitor doesn’t have enough resources as your business does.
Opportunities will give you insight into ways to grow your business such as business development, new markets to enter and more. These could be opportunities your competitor didn’t take advantage of or failed to do so efficiently such as entering a new specific geographical region to do business in or entering a new industry.
On the other hand, threats will consider the outside market factors including technological, environmental and regulatory factors that could affect your business such as an environmental disaster that affects the industry you and your competitor do business in.
By not only understanding your business’ SWOT but your competitor’s as well, you’ll recognize the value your business provides compared to your competitor and how to profit given your competitor’s advantages and disadvantages while considering external market factors.
Track down the competition
Along with SWOT-ing your competition, you’ll want to do additional research and dig deeper to track down other key competitor behaviors such as their marketing behavior, financial health and employee hiring actions.
You’ll want to ask yourself many important questions including:
Does your competitor have a strong online presence from their website to social media channels?
Where are your competitor’s marketing efforts going to?
Does your competitor have a large or small team and how often do they hire?
Is your competitor profitable and have strong sales?
Does your competitor have a good relationship with its customers?
These are all important factors to consider when understanding what your competitor is doing most effective and ineffective and learning how to profit from your competitor’s failures.
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What’s the market saying?
After analyzing your competition compared to your business, you’ll have a good insight into your business’ and competitor’s behavior and an even better understanding of what went wrong for your competitor — but, what is the market really saying?
Conducting your own competitive analysis will give you a significant awareness of how to grow your business while considering market threats, but next you’ll need to listen to how the market, especially consumers, are reacting and responding to your competitor’s failure.
What are consumers saying? It’s easy to research online to see what negative and positive things consumers are saying on company websites, social media channels, forums and more. It’s also important to analyze how your competitor is responding to what these consumers are saying and how your competitor is handling day-to-day consumer interactions.
Are consumers complaining? If so, what are they complaining about? Are these complaints about a specific product, an executive or a risky company news topic? How is your competitor responding to these consumer complaints?
Asking yourself these types of important questions will help you to better position your business in the market, allow you to be strategic in avoiding similar outcomes and capitalize on the best option for your business.
Now that you’ve analyzed your competitor’s behavior as well as what’s going on in the market, you should have a good sense of the best course of action for your business to take to profit from your competitor’s actions.
Were your competitor’s customers dissatisfied with their company or product? If so, this could mean new customers or business leads for your team to approach.
If your competitor is no longer in business, this could equal more market share for your business to capitalize on.
Did your competitor have too many or not enough employees to effectively service the business and clients? Maybe your business needs to hire more employees or downsize your team to be most efficient.
Learning from this rare opportunity presented to you should allow you to take a profitable course of action for your business.
When your competitor faces a failure it’s important to remember this isn’t an automatic win for your business but a rare opportunity to learn from your competitor’s mistakes without suffering the same consequences. By seizing the opportunity, understanding your competition, listening to the market and taking the best course of action, you can be strategic and easily profit from your competitor’s failures.
Have you ever profited from a competitor’s failure? What lessons did you learn? We’d love to hear about it!