Alibaba CEO Jack Ma is standing his ground. The man who famously said "competition is for fun" and that he wanted to "win eBay, buy Yahoo and stop Google" is trying to position his Chinese e-commerce platform as the best in the world.
But given the recent challenge from competitor Wanda E-commerce, it might be time for Ma to take competition a little more seriously. After all, Wanda recently raised $161 million in funding, and it has the potential to seriously threaten Alibaba's market position.
If your small business takes Ma's laissez-faire approach to competition, you could find yourself overtaken by rivals. When competitors start to knock at your market's door, you better be ready for the challenge.
The first step is to identify and assess your competition to determine how you'll come out on top. Here are six categories you should analyze:
Related Article: How to Stay on Top of a New Competitor
The first step is learning your main competitor's motivation, or its "why." Why is it in business, and what is the main goal?
Once you've figured that out, you can determine if your competitor is living up to its lofty aspirations. You should also assess how (if at all) its value proposition differs from yours. Then determine if it's a compelling, attractive proposition.
This one is key. What are your competitor's main sources of revenue and profitability? How does it make its money, and why is it successful?
The answers to these questions should dictate your response. You can either copy its methods or try to stay one step ahead. You'll make money either way, but you'll have to anticipate your competitor's tactics or quickly innovate to continue to lead the market.
Companies need strong relationships to grow. Look into your competitor's relationships with customers, clients, vendors and more.
How rich is its social capital? Are these relationships making a difference? To monitor these relationships, you'll need to connect with customers and tap into as many sources as possible.
Related Article: Building Barriers to Entry- How to Keep the Competition at Bay
How do stakeholders, employees and customers perceive your competitor? Compare that perception to the way people respond to your brand. Is your competitor's customer service better? Does the brand have a loyal following? Why?
The way your company handles conflict says a lot about your strengths. But how does your competitor manage crises or threats to its reputation? Does it anticipate customer needs and trends?
You can learn a lot from gauging your competitor's resilience. It might even help you be more aware of marketing dynamics, local nuances and global trends.
Rousers are the talented individuals who get the most out of their teams. Who are your competitor's rousers? How do they get employees on board with the company vision? Do you have rousers in your company?
Ma views competition as a positive thing, and he's right! It pushes your business to be unique and more relevant. Then again, it can also push you out of the market if you don't respond appropriately to secure your position.
If you're alone in your niche or market, relax and enjoy the ride (but don't get too complacent). Otherwise, you better be fit and ready to compete. A big part of that preparation involves asking the right questions so you can assess your competitors. When you know a competitor inside and out, you can counter with a winning strategy.